Understanding Purchase Invoices

A Purchase Invoice is the record of money your company owes to a supplier — a vendor's bill entered into REDA Financials. It is the heart of your Accounts Payable (AP) process: every vendor bill, every direct expense, and every credit a vendor gives you is captured as a Purchase Invoice. This article explains what a Purchase Invoice is, the three types you will work with, how one moves through its life from draft to paid, and how it keeps your books accurate along the way.

What a Purchase Invoice records

Every Purchase Invoice in REDA Financials answers five questions:

• Who do we owe? — the Vendor (the supplier's account).
• Which of our companies owes it? — the Entity. If your organization runs several legal companies in REDA Financials, each invoice belongs to exactly one of them. At Meridian Properties Group, for example, a janitorial bill for the New York tower belongs to Meridian Properties US LLC.
• What was it for? — the invoice lines, each pointing to a product or service and the expense account it should be recorded against.
• When? — the Invoice Date (the date on the vendor's bill) and the Due Date (when payment is expected — suggested automatically from the vendor's payment terms).
• How much? — the totals: subtotal, tax, any withholding tax, and the final Invoice Total Amount.

A posted and fully paid Purchase Invoice — CityClean Services' monthly janitorial bill for Meridian Properties US LLC. The header answers who, which company, when, and how much; the Invoice Summary panel on the right shows at a glance that nothing is left to pay — 100% settled.

The three invoice types

When you create a Purchase Invoice, the first choice you make is the Invoice Type. It tells REDA Financials what kind of document this is and changes how the system behaves:

A worked example from Meridian Properties US LLC, which manages a commercial tower in New York:

• The monthly janitorial bill from CityClean Services ($2,200) is entered as an Invoice — it is paid by check a few weeks later.
• The monthly electricity bill from MetroPower Utilities ($3,400) is on auto-debit, so it is entered as an Expense — posting it records the cost and the bank payment together.
• When Summit HVAC Inc overcharged $300 on a maintenance bill, they issued a credit note — entered as a Vendor Memo of −$300 and applied against their open invoice.

An Expense-type invoice: Meridian's monthly electricity bill. Because the utility collects payment automatically from the bank account, posting this invoice records the cost and generates the payment in one step — you can see it under Auto Disbursements in the related lists.

The invoice life cycle: Draft → Posted → Void

Every Purchase Invoice carries a Status that controls what you can do with it:

What happens when you post

Posting is the moment bookkeeping happens. When you change an invoice from Draft to Posted, REDA Financials automatically creates balanced accounting entries in your general ledger. For the CityClean janitorial bill above, posting records:

Two things are worth noticing:

• The expense side comes from each invoice line's GL Account — so one invoice can spread costs across several accounts (say, building repairs on one line and materials on another).
• The liability side goes to your entity's Accounts Payable account automatically. You never book AP by hand. (An invoice can override the AP account for special cases using its AP Account field.)

You can inspect the exact entries any invoice created by opening its Accounting Transactions from the Related List Quick Links. If taxes apply to the lines, the tax amounts post to their own tax accounts as well — see PI Tax & Tax Profiles.

The approval gate

Separate from Status, each invoice has an Approval Status — Not Required, Pending, Approved, or Rejected. An invoice can only be posted when its approval status is Approved or Not Required. This lets your organization require sign-off on bills before they reach the books, without blocking day-to-day data entry.

How an invoice tracks its own payment

Once posted, a Purchase Invoice keeps score of everything that settles it:

• Invoice Balance Due — what is still unpaid, after every payment and memo credit is counted.
• Applications tab — shows each payment and each Vendor Memo applied to this invoice, with dates and amounts.
• Aging Bucket — the invoice classifies itself automatically as Paid, Current, 1-30, 31-60, 61-90 or 90+ days past due, and flags itself as overdue when the due date passes. These fields drive your AP aging reports in real time.
• Invoice Summary panel — the card on the right of the record page shows the settled percentage, amount paid, memo credits applied, and the outstanding balance at a glance.

At Meridian, the lobby-renovation bill from Apex Construction Co ($48,000) was part-paid with a $24,000 wire transfer — so its record shows an Invoice Balance Due of $24,000, a 50% settled progress bar, and the wire listed under Applications.

How an invoice meets the budget

A Purchase Invoice can be tied to a Budget — exactly as a Purchase Order can. The Budget field on the invoice points at one of your posted budgets (only posted budgets are eligible), and it decides which budget line the invoice's cost is measured against. There are two ways an invoice arrives at its budget, and both keep the numbers honest:

• A bill matched to a Purchase Order inherits the order's budget and its budget line. When the order posted, its value was set aside as a commitment; when the matched bill posts, that commitment converts into actual spending — the same money, counted once. It does not consume the budget a second time.
• A direct-expense bill — one with no order behind it — carries its own Budget. Each line finds its budget line by its expense account and dimensions (its Cost Center and any other tags your administrator tracks), and posting books the actual straight to that line.

So budget control flows from the order to the bill: the commitment rolls up when the order posts, the actual rolls up when the invoice posts, and each lands on the correct budget line. At Meridian, the Sterling Facility Services facade-clean order committed its budget when it was raised; each visit's matched bill then turned that commitment into real spending as it was invoiced. A direct utility bill with no order — Meridian's MetroPower electricity — instead matches its own budget line and books the actual itself.

While the invoice is a Draft, this stays flexible: change a line's expense account or a dimension and the invoice re-finds the right budget line; change the header Budget and its lines re-resolve against the new one. Once you post, the Budget locks — the actual is already rolled up — so to change it you reopen the invoice to Draft (or void it) first. The mechanics of the check itself live in PO Budget Analysis.

Finding your way around the record page

Open any Purchase Invoice and you'll find its full story organized into tabs:

The action buttons at the top adapt to the invoice's type and status — for example, Match Purchase Order appears on Invoice-type documents, and Allocate Expenses becomes available once the invoice is posted.

Automatic numbering

Invoice names like MPI001008 are assigned automatically from your entity's Document Sequences — each entity numbers its own purchase invoices independently, with a prefix and running number your administrator configures. The vendor's own invoice number belongs in the Reference field, so you can always find a bill by either number.

Who can work with Purchase Invoices

Access is controlled by the permission sets your administrator assigns:

• Accounts Payable and Accounting Admin can create, post, and void purchase invoices.
• Accounting Controller and Read Only can view them but change nothing — the controller reviews the subledgers and works at the journal level.
• Accounts Receivable users work on the customer side and do not manage AP documents.

See Permission Set Assignment for the full picture.

Where to go next

1. Creating a Purchase Invoice — the step-by-step walkthrough.
2. PI Tax & Tax Profiles — how line amounts and taxes are calculated.
3. Posting & Voiding a PI — the lifecycle in depth.
4. Understanding Cash Disbursements — how invoices get paid.
5. Understanding Vendor Memos — handling credits from vendors.
6. PO-to-PI Line Matching — three-way matching against purchase orders.

Frequently asked questions