This page contains instructions on how to make the accounting entries for purchases paid in cash or by card. These include purchases paid using the company's cash assets or card or person's own cash or card.
Purchase paid using the company’s cash assets (cash purchase)
- Cash purchases can be entered as a journal receipt or purchase invoice. Each purchase does not have to be entered as a separate journal receipt or a purchase invoice. The purchases can be gathered from a certain period of time (for example a week or month) and entered as a consolidated journal receipt.
- Journal receipt or purchase invoice must be created at least once a month so that the VAT is registered to the right month. VAT summary and Tax return for self-assessed taxes can be created and the cash assets balanced only when the journal receipt or purchase invoice has been created and approved.
Entering as a journal receipt
- Choose the VAT type of the journal receipt as Purchase and after this choose the right VAT status for the purchase in question.
- The consolidated purchase information is entered by VAT rate in the journal receipt. If needed, it is possible to create a detailed statement of purchases in an Excel sheet, which can be added as an attachment to the journal receipt.
- When the journal receipt is ready for approval for the official accounting, click the Approve button to set the journal receipt’s status to Approved. It is possible to edit the postings of the approved journal receipt if the tracking period is still open.
Entering as a purchase invoice
- Purchase invoice has to be created at least once a month so that the VAT is registered to the right month.
- For creating purchase invoice, it is recommended to create a supplier register that can be named, for example, “Cash purchases”. This supplier’s default account 2880 (Payment transfer) should be changed to credit account 1900 (Money / Cash assets) in the Default account view.
- When the created supplier is chosen for entering cash purchases the purchase invoices will automatically register to account 8450 (Other administration expenses) / 1900 (Money / Cash assets).
- Using the supplier register makes the search of the invoices easier in the future and makes the reporting clearer.
- The consolidated purchase information is entered by VAT rate to the invoice.
- If the purchases need to be tracked in the product level or postings need to be made to different accounts, it is recommended to add products to the product register that have the wanted default accounts and use these products.
- If some products are frequent cash purchases, the products can be added to the default products for business partners.
- The invoice will be clearer if the product lines include the VAT either by checking the Prices include VAT (Unit prices incl. VAT) or by marking the purchase products to include the VAT as default in the VAT defaults.
- When the purchase invoice has been created and approved, it must be marked as Paid elsewhere in the Payment view.
- The postings of the invoice do not have to be changed if a supplier has been used for the purchase invoice and supplier’s default account is 1900 (Money / Cash assets)
- In other cases, the postings must be changed from the account 2880 (Payment transfer) to 1900 (Money / Cash assets) in the Accounting view of the invoice.
- Also, other changes to postings can be made in the Accounting view and possible dimensioning can be done in Dimensions view that can be accessed through the Dimensions button.
- If you are using Procountor’s Inventory Management feature and purchase stocked products in cash, it is advisable to make the accounting entries as purchase invoices, because stock transactions cannot be generated from journal receipts.
Making a purchase using the company’s bank card
- It is recommended to create a dedicated account for bank card purchases, for example 2881 (Bank card purchases).
- Bank card purchases are marked on the bank statement with their own entry explanation, no. 721. Go to Management > Accounting info > Posting defaults > Bank statement posting defaults, and change the default posting as 2881 Bank card purchases (Procountor’s given default: 2880 Payment transfer account) for the entry explanation.
- This way the payments for bank card purchases are automatically posted to their dedicated account 2881, which makes it easier to monitor them.
- The actual purchases made using a bank card are entered using a journal receipt as in section “Purchase paid using the company’s cash assets (cash purchase)”, with the exception that instead of account 2880 the credit entry is allocated to the account created for bank card purchases (in this example account 2881).
- Instead of a journal receipt, the bank card purchases can also be entered as an expense invoice. In this case the credit entry should be allocated to an account created for bank card purchases (in this case 2881) instead of the account 2880.
Making a purchase using the person’s money, bank card or credit card
- Person creates a travel or expense invoice of his/her purchases and with that the company pays the expenses to the person.