Managing Invoices in ERPNext

In most companies, fulfilling an order involves multiple departments and documents. The sales team captures details in a Sales Order, the warehouse prepares goods via a Delivery Note, and the accounting team finalizes the financial details using an invoice. This separation of duties ensures clear responsibilities.

This chapter covers the two primary types of invoices in ERPNext: Sales Invoices and Purchase Invoices.

Understanding Sales Invoices

A Sales Invoice is a formal document sent to a client detailing the goods, services, prices, and payment terms. In ERPNext, the Sales Invoice serves a dual purpose:

1. Client Facing: It contains the necessary information to be printed and sent to the customer.
2. Accounting: It contains the necessary data to update the books of accounts, such as income accounts, receivable accounts, cost centers, and accounting dimensions.

Once a Sales Invoice is submitted, the Income and Receivable accounts are automatically updated.

How to Create a Sales Invoice:

1. Navigate to Accounting > Sales Invoice (under Accounts Receivable), or use the Awesome Bar to search for "Sales Invoice List".
2. Click on Add Sales Invoice.
3. Enter the customer's details, including billing and shipping addresses.

1. Add the details of the goods or services being offered, specifying the Item, Quantity, and Rate.
2. Select the appropriate Sales Taxes and Charges Template.

1. Define the Payment Terms and the Terms and Conditions.
2. Enter details regarding the sales team or sales partner involved in the transaction.
3. Optional: You can update specific accounting details like the income account, cost center, or project for each item individually if needed.
4. Save and Submit the document.

Understanding Purchase Invoices

A Purchase Invoice is the internal document created when you receive a bill from a vendor. It records the vendor's details regarding goods, services, prices, taxes, and payment terms. It also maps this information to your internal expense accounts, payable accounts, and cost centers.

Once a Purchase Invoice is submitted, the Expense and Payable accounts are automatically updated.

How to Create a Purchase Invoice:

1. Navigate to Accounting > Purchase Invoice (under Accounts Payable), or use the Awesome Bar to search for "Purchase Invoice List".
2. Click on Add Purchase Invoice.
3. Enter the supplier's details, including the billing/shipping address and contact person.

1. Add the details of the goods or services being received, specifying the Item, Quantity, and Rate.
2. Select the appropriate Purchase Taxes and Charges Template.

1. Define the Payment Terms and the Terms and Conditions.
2. Optional: Similar to sales invoices, you can update the expense account, cost center, or project for each individual item if needed.

Save and submit the document.