Creditor Invoice
Creditor invoices are used to record costs incurred from creditors. This may be in relation to disbursements or other deferred expenses such as utility bills.
They are typically recorded using creditor invoice journal (CRJ) or non-cash disbursement journal (DSJ) transactions, wherein each unique invoice number or date creates a separate invoice.
The main purpose of creditor invoices (as items distinct from transactions) is in invoice allocation and facilitating the aged creditors report. They can be thought of as the opposite of regular (debtor) invoices.
Properties
Creditor invoices have the following properties:
- Invoice number (optional)
- Invoice date (identifies the invoice when there is no number)
- Due date
Invoice Totals
Since the line items that make up an invoice may be recorded by several different transactions, creditor invoices independently track their totals, including the amount owing.
If creditor invoices are used to record capital purchases, the capital and non-capital components of the invoice total are also tracked for allocation purposes (see below).
Creditor Invoice Allocation
When a creditor invoice is paid by means of a creditor payment (CRP) transaction, funds must be allocated in order to determine:
- Which invoice(s) have been paid; and
- How much sales tax (GST) the business can claim as an input tax credit
This is particularly important when partial payments are made.
ContactsLaw allocates funds automatically by default, however this can be adjusted by the user.
Where invoices include capital and non-capital components, payments allocate to these on a pro-rata basis. For example:
- If the invoice represents a capital purchase of $100 and $50 is paid, then $50 is allocated to capital
- If the invoice represents a capital purchase of $150 plus a non-capital purchase of $50 and $100 is paid, then $75 is allocated to capital and $25 is allocated to non-capital