iDempiere Vendor Invoice Processing

The Purchase Invoice and Credit/Debit Note window in iDempiere manages all supplier billing transactions for retail operations. It is the core AP window used to record supplier invoices for goods, services, freight, and expenses — linked to purchase orders, goods receipts, and payment processing. Every invoice completed here drives AP liability accounting, GST tax recording, and vendor balance updates, making it critical for accurate financial reporting and compliant tax filing.

Invoice Received for Stock Purchased from a Supplier

Overview

Used when a retail store receives goods from a supplier and needs to record the supplier’s invoice for payment. This is the most common AP entry in a retail operation — triggered on the day the supplier bill arrives.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Target Document Type	AP Invoice	Classifies the document as a supplier invoice.
Business Partner	Britannia Distributor — Chennai	The supplier being billed.
Date Invoiced	06/12/2026	Date on the supplier’s physical invoice.
Account Date	06/12/2026	Determines the accounting period for GL posting.
Product	BRI-GDBC-200_Britannia Good Day Butter Cookies — 200g	Item being invoiced.
Quantity	200	Units received and billed.
Unit Price	55.00	Agreed purchase price per unit.
Tax	CGST/SGST 18%	Applicable GST on the purchase.

Process Flow

• Supplier delivers the goods, and a Goods Receipt is recorded in iDempiere.
• Upon receiving the supplier’s invoice, the finance team creates an AP Invoice.
• The AP Invoice is linked to the corresponding Purchase Order (PO).
• Invoice lines and tax details are reviewed and verified.
• The AP Invoice is completed and processed.
• The transaction is automatically posted to the General Ledger (GL) for accounting.

System Behavior

• Creates AP liability accounting entry (Cr: AP Liability, Dr: Inventory/Expense).
• Updates supplier open balance in the Business Partner record.
• Splits GST into CGST and SGST in the Invoice Tax sub-tab automatically.
• Locks the invoice on Completion — no further edits allowed.

Retail Example

Chennai Store receives 200 packs of Britannia Good Day Butter Cookies — 200g from Britannia Distributor — Chennai at INR 55/unit. Total line value: INR 11,000. GST 18% (CGST 9% + SGST 9%) adds INR 1,980. Grand Total: INR 12,980.

Outcome

• Supplier invoice is recorded and payable in iDempiere.
• AP balance for Britannia Distributor — Chennai increases by INR 12,980.
• CGST and SGST input tax credits are available for filing.

Invoice Goods Received Against an Existing Purchase Order

Overview

The supplier invoice is recorded by linking it to a previously approved Purchase Order. This ensures pricing, quantities, and supplier details are pulled automatically from the PO, reducing data entry errors.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Purchase Order	800008_06/09/2026	PO linked to this invoice.
Date Ordered	06/09/2026	Auto-filled from the PO.
Purchase Order Line	800008_06/09/2026_10_605000	Specific PO line matched to the invoice line.
Product	BRI-GDBC-200_Britannia Good Day Butter Cookies — 200g	Item on the PO.
Unit Price	55.00	PO-agreed unit price.
Line Amount	11,000.00	200 × 55.00.

Process Flow

• A Purchase Order (PO) is approved in iDempiere, and the ordered goods are received through a Material Receipt.
• Once the supplier invoice is received, the finance team opens the AP Invoice window.
• The AP Invoice is linked to the corresponding Purchase Order using the Purchase Order field.
• Invoice lines are automatically populated from the Purchase Order.
• Prices and quantities are reviewed and verified against the supplier invoice.
• The AP Invoice is completed and processed for accounting.

System Behavior

• PO link auto-fills Business Partner, Partner Location, Price List, and Currency.
• Invoice lines are populated from PO lines using the Create Lines from PO function or direct PO reference.
• System validates that invoice quantities do not exceed PO ordered quantities.
• PO reference is stored on every invoice line for traceability.

Retail Example

PO 800008 was raised on 06/09/2026 for 200 units of Britannia Good Day Butter Cookies at INR 55. Invoice 1000001 is raised on 06/12/2026 referencing this PO. The invoice line auto-fills with the PO product and price.

Outcome

• Invoice is fully traceable to the originating PO.
• Pricing and supplier details are consistent with the approved PO.
• Audit trail is maintained from PO through invoice.

Verify Supplier Invoice Against Received Goods (Three-Way Match)

Overview

Before approving payment, the purchasing or accounts team verifies that the supplier invoice matches both the Purchase Order and the Goods Receipt. This three-way match process prevents overpayment and catches delivery discrepancies.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Purchase Order	800008_06/09/2026	PO reference for quantity and price check.
Purchase Order Line	800008_06/09/2026_10_605000	Line-level PO match.
Receipt Line	(linked to Goods Receipt)	Goods Receipt line matched to this invoice.
Quantity	200	Must match goods receipt quantity.
Unit Price	55.00	Must match PO agreed price.
Line Amount	11,000.00	Must match PO line amount.

Process Flow

• The supplier invoice is received and reviewed against the related Purchase Order and Goods Receipt.
• The invoice quantity is compared with the Purchase Order quantity.
• The invoice quantity is verified against the received quantity recorded in the Goods Receipt.
• The invoice unit price is compared with the agreed Purchase Order price.
• If the quantities and prices match, the invoice passes the three-way matching process.
• The AP Invoice is completed and posted to the General Ledger (GL) for payment processing.

System Behavior

• Invoice line stores Purchase Order Line reference for PO matching.
• Receipt Line field on the invoice line links to the Goods Receipt line for receipt matching.
• iDempiere does not auto-block invoices when quantities differ — the team must manually verify and flag discrepancies.
• Discrepancies can be flagged using the In Dispute checkbox on the invoice header.

Retail Example

Britannia Distributor invoices 200 units at INR 55. The Goods Receipt shows 200 units received. The PO also shows 200 units at INR 55. All three match. Finance completes the invoice and releases for payment.

Outcome

• Invoice is verified as accurate before payment.
• Prevents overpayment for goods not received or at wrong prices.
• Audit trail confirms PO, Receipt, and Invoice are aligned.

Process Supplier Invoice for Partial Deliveries

Overview

A supplier delivers only part of the ordered quantity and invoices only for what has been delivered. iDempiere allows invoicing against partial quantities while keeping the remaining PO quantity open for future delivery and invoicing.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Purchase Order	800008_06/09/2026	Original PO for the full order.
Product	BRI-GDBC-200_Britannia Good Day Butter Cookies — 200g	Partially delivered product.
Quantity Invoiced	100	Only the delivered portion is invoiced.
Unit Price	55.00	Agreed price per unit.
Line Amount	5,500.00	Partial delivery value.

Process Flow

• A Purchase Order (PO) is created for 200 units of a product.
• The supplier delivers 100 units, and a Goods Receipt is recorded for the received quantity.
• The supplier submits an invoice for the 100 units delivered.
• An AP Invoice is created with an invoice quantity of 100 units.
• The invoice is reviewed and completed for accounting and payment processing.
• The remaining 100 units on the Purchase Order stay open and can be received and invoiced in future deliveries.

System Behavior

• Invoice is created for only the delivered (received) quantity.
• The PO remains open in iDempiere for the remaining quantity.
• Quantity Invoiced field on the invoice line reflects the partial quantity.
• Tax is calculated only on the partial invoice value.

Retail Example

Chennai Store ordered 200 units. Britannia delivers 100 units on 06/12/2026. Finance records an AP Invoice for 100 × INR 55 = INR 5,500 + GST. The remaining 100 units will be invoiced when the second delivery arrives.

Outcome

• Invoice reflects only goods actually received — no overpayment.
• PO balance is tracked accurately for remaining deliveries.
• Cash flow is managed by paying only for delivered goods.

Process Multiple Supplier Invoices for a Single Purchase Order

Overview

A large purchase order is fulfilled in multiple shipments, and each shipment is invoiced separately. iDempiere supports creating multiple AP invoices against the same PO until the total ordered quantity is fully invoiced.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Purchase Order	800008_06/09/2026	Single PO fulfilled across multiple invoices.
Invoice 1 – Quantity	100	First shipment quantity.
Invoice 2 – Quantity	100	Second shipment quantity.
Unit Price	55.00	Consistent price across all invoices.

Process Flow

• A Purchase Order (PO) is created for 200 units of a product.
• The supplier makes the first delivery of 100 units, and an AP Invoice is created for the delivered quantity.
• The supplier later delivers the remaining 100 units, and a second AP Invoice is created.
• Both AP Invoices are linked to the same Purchase Order.
• After both invoices are completed, the Purchase Order is fully invoiced and closed.

System Behavior

• Each AP Invoice references the same Purchase Order.
• iDempiere tracks cumulative invoiced quantities against the PO.
• System prevents invoicing beyond the total PO ordered quantity.
• Separate accounting entries are created for each invoice.

Retail Example

PO 800008 for 200 units. First invoice in June for 100 units (INR 5,500). Second invoice in July for remaining 100 units (INR 5,500). Total invoiced: INR 11,000 — matching the full PO value.

Outcome

• All deliveries from the PO are accurately tracked and invoiced.
• Payments are released in line with actual deliveries.
• PO is fully closed once all quantities are invoiced.

Process Supplier Invoice Covering Multiple Purchase Orders

Overview

The supplier consolidates deliveries from several purchase orders into a single invoice. In iDempiere, this is handled by creating one AP Invoice with multiple invoice lines, each referencing a different PO line.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Business Partner	Britannia Distributor — Chennai	Single supplier across all POs.
Invoice Line 1 – Purchase Order Line	800008_06/09/2026_10	First PO line reference.
Invoice Line 2 – Purchase Order Line	800009_06/10/2026_10	Second PO line reference.
Tax	CGST/SGST 18%	Consistent tax across lines.

Process Flow

• Multiple Purchase Orders (POs) are created for the same supplier.
• The supplier delivers the goods against the respective Purchase Orders.
• The supplier issues a single consolidated invoice covering all deliveries.
• The finance team creates one AP Invoice in iDempiere.
• Multiple invoice lines are added, with each line linked to the corresponding Purchase Order line.
• The AP Invoice is reviewed and completed.
• A single accounting transaction is posted, covering the purchases from all related Purchase Orders.

System Behavior

• Single AP Invoice can contain multiple invoice lines referencing different PO lines.
• Each line independently tracks its own PO line reference and receipt line.
• Tax is calculated individually per line based on each product’s tax category.
• Grand Total reflects the consolidated sum of all lines and taxes.

Retail Example

Britannia delivers goods from PO 800008 (Butter Cookies) and PO 800009 (Marie Gold Biscuits) together. Finance raises one AP Invoice with two lines, referencing each PO. Invoice total covers both deliveries.

Outcome

• Supplier payment consolidated into one transaction.
• All PO lines are matched and closed through the single invoice.
• Accounting entry captures the full consolidated purchase.

Process Supplier Invoice for Non-Inventory Expenses

Overview

Retail stores incur regular operating expenses such as security services, housekeeping, maintenance, rent, utilities, and consulting. These are recorded as AP invoices using the Charge field on the invoice line instead of a product.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Target Document Type	AP Invoice	Standard supplier invoice.
Business Partner	SecureGuard Services — Chennai	Service provider.
Charge	Security Services Expense	Expense charge code — used instead of Product.
Unit Price	15,000.00	Monthly security service fee.
Tax	CGST/SGST 18%	GST applicable on services.

Process Flow

• A service is provided to the business, and the vendor submits an invoice for the service charges.
• The finance team creates an AP Invoice without linking it to a Purchase Order.
• A Charge is selected to classify the expense type, such as utilities, maintenance, or consulting fees.
• The appropriate General Ledger (GL) account is automatically derived from the selected Charge.
• The invoice details are reviewed and verified.
• The AP Invoice is completed and posted to the General Ledger for accounting and payment processing.

System Behavior

• Charge field assigns the expense to the correct GL account (e.g., Security Expense).
• No inventory movement is triggered — purely a financial entry.
• Accounting debits the expense GL and credits the AP liability account.
• No PO or Goods Receipt is required for expense invoices.

Retail Example

Chennai Store pays INR 15,000 per month to SecureGuard Services. Finance creates an AP Invoice for June with Charge = Security Services Expense. GST 18% = INR 2,700. Total payable: INR 17,700.

Outcome

• Operating expense is recorded in the correct GL account.
• GST input credit on services is captured for tax filing.
• Vendor balance is updated for payment scheduling.

Record Transportation and Freight Charges from Suppliers

Overview

Suppliers often charge freight or delivery costs along with the goods. These charges can be added as a separate invoice line using a Charge code for freight, ensuring accurate expense tracking and GST compliance on transportation.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Business Partner	Britannia Distributor — Chennai	Supplier who charged freight.
Invoice Line 1 – Product	BRI-GDBC-200_Britannia Good Day Butter Cookies — 200g	Goods being supplied.
Invoice Line 2 – Charge	Freight Charges	Freight expense charge code.
Freight Unit Price	500.00	Freight cost billed by supplier.
Tax on Freight	CGST/SGST 18%	GST on transportation services.

Process Flow

• The supplier delivers goods and includes freight charges on the invoice.
• The finance team creates an AP Invoice in iDempiere.
• A product line is added to record the purchased goods.
• A separate invoice line is added using the Charge field to record freight expenses.
• Both the product and freight charge lines are included in the same AP Invoice.
• The invoice is reviewed, completed, and posted to the General Ledger (GL).

System Behavior

• Product line and Charge line can coexist in the same AP Invoice.
• Freight charge is posted to the Freight Expense GL account.
• GST is calculated separately on the freight charge line if applicable.
• Grand Total includes goods value + freight + all GST amounts.

Retail Example

Britannia invoices INR 11,000 for cookies plus INR 500 freight. Finance creates one AP Invoice with two lines. Total before GST: INR 11,500. After 18% GST on both lines: Grand Total ≈ INR 13,570.

Outcome

• Freight is accurately separated from goods cost in the GL.
• Full supplier invoice is captured in a single AP document.
• GST on freight is claimed as input tax credit.

Process Supplier Invoice with Agreed Discounts

Overview

Suppliers may provide trade discounts, promotional pricing, or negotiated rate adjustments that reduce the invoice amount. In iDempiere, these are reflected as a lower Unit Price on the invoice line compared to the List Price.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
List Price	60.00	Supplier’s standard catalogue price.
Unit Price	55.00	Discounted price agreed with supplier.
Price	55.00	Actual price used for invoice line calculation.
Line Amount	11,000.00	Quantity × discounted Unit Price.

Process Flow

• The supplier and buyer agree on a discounted purchase price for the goods.
• The supplier issues an invoice using the negotiated discounted rate.
• The finance team creates an AP Invoice and enters the discounted Unit Price.
• The original List Price remains visible for reference and price comparison.
• The line amount is automatically calculated based on the discounted Unit Price and quantity.
• The AP Invoice is reviewed and completed for accounting and payment processing.

System Behavior

• Unit Price drives the line amount calculation — not the List Price.
• List Price is stored for reference and discount analysis but does not affect the invoice total.
• Tax is calculated on the discounted invoice value (Unit Price × Quantity).
• Discount Printed checkbox on the invoice header controls whether the discount is shown on the printed invoice.

Retail Example

Britannia’s standard price (List Price) for Butter Cookies is INR 60. The store negotiated INR 55 per unit. The AP Invoice is raised with Unit Price = 55. The store saves INR 5 × 200 = INR 1,000 on this order.

Outcome

• Invoice reflects the agreed discounted price.
• GST is calculated on the actual invoice amount, not the list price.
• Store benefits from the negotiated savings in inventory cost.

Process Supplier Invoice with Tax Charges

Overview

Supplier invoices in India include GST — split into CGST and SGST for intra-state purchases. iDempiere automatically calculates and records the tax amounts in the Invoice Tax sub-tab based on the tax rate assigned to the product.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Tax (Invoice Line)	CGST/SGST 18%	Tax rate applied to the invoice line.
Tax (Invoice Tax – Record 1)	CGST 9%	Central GST component.
Tax Amount (CGST)	990.00	9% of INR 11,000 base amount.
Tax (Invoice Tax – Record 2)	SGST 9%	State GST component.
Tax Amount (SGST)	990.00	9% of INR 11,000 base amount.
Tax Base Amount	11,000.00	Pre-tax invoice line total.
Price Includes Tax	Unchecked	Tax is charged on top of the line price.

Process Flow

• A tax category is assigned to the product, and an invoice line is created using the CGST/SGST 18% tax rate.
• When the AP Invoice is created, iDempiere automatically splits the tax into CGST 9% and SGST 9%.
• The tax amounts are calculated based on the invoice Tax Base Amount.
• The calculated tax values are displayed in the Invoice Tax tab.
• For a taxable amount of INR 11,000, CGST is calculated as INR 990 and SGST as INR 990.
• The Grand Total is calculated as INR 11,000 + INR 990 + INR 990 = INR 12,980.
• The AP Invoice is then completed and posted for accounting.

System Behavior

• CGST and SGST appear as two separate records in the Invoice Tax sub-tab.
• Tax Base Amount equals the sum of all invoice line amounts before tax.
• Tax Amount for each component is calculated automatically based on the rate.
• Grand Total on the invoice header includes all tax amounts.
• Input tax credit amounts (CGST and SGST) are available for GST return filing.

Retail Example

AP Invoice for 200 units at INR 55 = INR 11,000. GST 18% applied: CGST 9% = INR 990, SGST 9% = INR 990. Grand Total = INR 12,980. Finance can claim INR 1,980 as input tax credit in the GST return.

Outcome

• GST is correctly recorded and split into CGST and SGST components.
• Input tax credit is available for the full INR 1,980.
• Grand Total accurately reflects the tax-inclusive invoice amount.

Handle Supplier Price Variations

Overview

When a supplier invoices at a price different from the agreed PO price, the accounts team must identify the variance, seek approval from the purchase manager, and either adjust the invoice or raise a dispute before releasing payment.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Purchase Order – Unit Price	55.00	Price agreed at the time of PO.
Invoice Line – Unit Price	58.00	Price billed by the supplier — higher than PO.
In Dispute	Checked	Flag the invoice when price variance is identified.
Description	Price variance under review with supplier	Record reason for dispute flag.

Process Flow

• An AP Invoice is created from the Purchase Order, and the supplier’s invoice price is compared with the agreed PO price.
• The finance team identifies a price variance, where the supplier’s unit price (58.00) differs from the PO price (55.00).
• The invoice is marked as In Dispute to prevent further processing until the issue is resolved.
• The purchase manager is notified to review the price discrepancy with the supplier.
• The supplier either confirms the revised price or issues a credit memo to correct the difference.
• The AP Invoice is updated, or the credit memo is applied as appropriate.
• Once the variance is resolved, the invoice is completed and posted for accounting and payment processing.

System Behavior

• iDempiere does not automatically block invoices with price variances — manual review is required.
• In Dispute checkbox on the invoice header flags the record for follow-up.
• Disputed invoices can still be completed — but payment should be held until resolved.
• If supplier agrees to adjust: create AP Credit Memo for the price difference.

Retail Example

PO price was INR 55. Britannia’s invoice shows INR 58. Finance flags In Dispute and contacts the supplier. Britannia agrees and issues a credit memo for INR 3 × 200 = INR 600 + GST. Finance processes the credit memo and clears the dispute.

Outcome

• Price variance is identified before payment is released.
• Supplier is notified and the difference is recovered through a credit memo.
• Accurate payment amount is maintained.

Approve Supplier Invoice Before Payment

Overview

Before releasing payment, the responsible department reviews the invoice for accuracy, completeness, and compliance. In iDempiere, this step is managed through the Document Action workflow — invoices move from Draft to In Progress to Completed only after approval.

Key Setup / Inputs

Field in iDempiere	Sample Value	Purpose
Document Status	In Progress / Draft	Status before approval.
Document Action	Complete	Action used to approve and complete the invoice.
Pay Schedule valid	Checked (after approval)	Confirms payment schedule is set.
In Dispute	Unchecked	Must be clear before payment is released.
Paid	Unchecked → Checked	Updated after payment is allocated.

Process Flow

• A supplier invoice is received and entered into iDempiere with a Drafted status.
• The finance team verifies the invoice details, including Purchase Order matching, Goods Receipt matching, tax calculations, and pricing.
• The invoice is reviewed and approved by the designated department head or authorized approver.
• The finance team selects Complete from the Document Action menu.
• The invoice status changes from Drafted to Completed.
• Accounting entries are automatically posted to the General Ledger (GL).
• The completed invoice becomes available for payment processing and settlement.

System Behavior

• Document Action = Complete locks the invoice and triggers accounting posting.
• Only Completed invoices are available for payment allocation.
• Posted button posts the accounting entries to the GL.
• Paid flag is updated automatically when payment is fully allocated to the invoice.
• Pay Schedule valid indicates a valid payment schedule has been generated.

Retail Example

AP Invoice 1000001 for INR 12,980 is in Draft. Finance verifies three-way match (PO, Receipt, Invoice all match). Purchase Manager approves. Finance clicks Document Action → Complete. Status changes to Completed. Invoice is posted and released to accounts payable for payment.

Outcome

• Invoice is verified and approved before any payment is released.
• GL entries are posted only after approval — financial records are accurate.
• Payment team can only process Completed invoices, ensuring compliance.