Purchase order to dispatch without breaking your books

Raise each document from the one before it, and let each one post its own entries in the books the moment it is saved. In RPM that is the Guided-Flow: a purchase order becomes a goods receipt, the receipt a supplier invoice, the invoice a payment; a quote becomes a sales order, the order an invoice, the invoice a payment and then a dispatch. Nothing is typed twice, so nothing is typed wrong twice, and the server checks every step before it lets it into the books. Below is what each step does, what keeps the figures right, what RPM doesn't do yet, and a short video of the whole flow.

The nine steps, and what each one posts

1. Purchase order. What you ordered, from whom, at what price. Nothing is posted: an order is a promise.
2. Goods In, raised with Receive Goods. What actually arrived. The stock goes onto the shelf at what it cost, which moves the item's average cost. Every line needs a unit cost, so stock never comes in at a cost of nothing.
3. Supplier invoice, raised with Supplier Invoice. What the supplier charged. Its cost goes onto the stock account, its tax onto input tax, and what you owe onto the supplier's account.
4. Supplier payment, raised with Pay Supplier. The money leaves the bank and the supplier's balance comes down.
5. Quote. What you offered the customer. Nothing is posted.
6. Sales order, raised with Convert to Sales Order. What the customer agreed to. Nothing is posted.
7. Invoice, raised with Convert to Invoice. A draft until it is issued; issued, the sale and its output tax go into the books and the customer's account is charged.
8. Payment, raised with Take Payment. The money goes into the bank or the till, and a payment that covers the invoice issues it.
9. Dispatch, raised with Dispatch. The goods leave the shelf, and what they cost moves from stock to cost of sales.

Each posted document is read-only from then on. A mistake is put right by another document — a credit note against an invoice, a supplier credit note against a bill — so what was sent to a customer, what a supplier was paid and what the books hold never drift apart.

What keeps the figures right

• The tax on every line is the server's. It is worked out again on every save, at the item's own rate or the company's, so a price typed in a hurry, or an old quote copied onto a new order, never carries the wrong tax. Items sold with no tax on them carry none, and a supplier with no tax number charges none.
• A draft is not a tax invoice. Printed while it is a draft, an invoice says it is a pro forma. A business with no tax number prints an invoice, not a tax invoice.
• Nothing is billed twice. Each conversion copies only what is left: what is still to invoice of an order, still to arrive on a purchase order, still to go out on an invoice. A supplier's invoice number is required, and a number already in the books for that supplier is refused.
• The stock account follows the shelf. A supplier who bills a different price from the receipt moves the item's average cost, or the cost of sales when the goods have already gone. A receipt that has been billed can no longer be changed; goods sent back go on a supplier credit note, which takes back their stock and their tax.
• Dates are the day it happened. An invoice is dated the day it is issued, a payment's dispatch the day of the payment, and a document dated more than a day ahead is refused. Each company's days are counted in its own time zone.
• Month end tells you what is still open. The Books screen says when last month's books are still open, and two reports give your accountant the month-end figures: what was invoiced but not yet sent, and what was received but not yet billed. The Tax Report lists payments taken on invoices that weren't issued yet.

What RPM doesn't do yet

• Bank reconciliation. RPM keeps the bank account, but doesn't yet match it to your bank statement.
• A tax return in your tax authority's layout. The Tax Report gives output and input tax and what is payable; it doesn't yet split standard-rated, zero-rated and exempt sales the way a VAT201 or a BAS asks.
• A year-end close. The balance sheet shows the profit to date; there is no closing of the year into retained earnings yet.
• Month-end journals by themselves. The month-end reports give the figures; the journal is still your accountant's to post.

If you need any of these, write to support@rpmcode.com and tell us how you work. The whole flow, screen by screen, is in the Guided-Flow guide.

See it in under two minutes

Play the 99-second video