Setting Up a Vendor
A vendor (or supplier) is an account you buy from. Setting one up is much like a customer, with one extra dimension that's worth understanding well: withholding tax. In several countries, when you pay certain vendors you must hold back a slice of the payment and send it to the tax authority on the vendor's behalf. The vendor's account is where you tell REDA how to do that. We'll set up Apex Consulting Pvt Ltd, an Indian consultancy whose fees are subject to TDS — the perfect example to see these fields in action.
Access you'll need. A vendor account is the standard Salesforce Account record, so vendors are typically set up by Accounts Payable v2 users or an Accounting Admin v2. Permission to create or edit the account itself comes from your Salesforce profile's access to the Account object, not from the REDA financial permission sets.
Step by step — Apex Consulting Pvt Ltd
Open the account and set Financial Type to Vendor
Enter the company name and address. Setting Vendor makes it usable on Purchase Invoices, Cash Disbursements, Vendor Memos and Purchase Orders — and keeps it out of sales lookups. Use the vendor's exact legal name as it appears on their invoices: REDA's OCR invoice capture matches scanned invoices to vendors by name, so a faithful name means automatic matches.
Set Territory and Tax Jurisdiction to India
Territory groups the vendor for reporting; Tax Jurisdiction tells the tax engine where they sit.
Enter the Tax Registration Number (GSTIN)
Apex's GST number, e.g. 27AAAAA0000A1Z5 — needed for your input-tax credit and printed on documents.
Enter the Taxpayer ID / PAN
The vendor's PAN, e.g. ABCDE1234F. This is a big one for vendors: it gates the withholding rate. When the Taxpayer ID is blank, REDA applies only the withholding rates marked No Tax ID — the punitive defaults tax law reserves for undocumented payees — instead of the normal rates. Always capture it.
Set Payee Classification to Company
Company / Individual / Non-Resident. It selects the right rate band — e.g. India 194C is 2% for a company but 1% for an individual, and a non-resident classification picks up non-resident rules such as section 195. Left blank, REDA treats the payee as a company. Apex is a company.
Choose the Party Tax Profile
The vendor's tax behaviour (a registered Indian business). Used by the tax engine the same way as for customers.
Set Withholding Tax Rule (Purchase) to India TDS 194J
194J covers professional fees (10%; the technical-services variant is 2%). This rule auto-fills on new Purchase Invoices for Apex and drives the calculation. (Leave blank for vendors you don't withhold from.)
Record withholding exemptions, if any
If Apex holds a Section 197 nil-deduction certificate, tick WHT Exempt (Purchase), record the certificate reference, and set the Valid To date. REDA then withholds nothing while it's valid — and automatically reverts to the standard rate once the invoice date passes the expiry.
Set the Default Payment Term
2/10 Net 30 here: due in 30 days, with a 2% discount if you pay within 10. See Payment Terms. (Set no term anywhere and REDA falls back to a generic 30 days.)
Set PDF Language / Locale, switch Financial Active on, save
For Apex: en / en_IN. Financial Active confirms the account is open for business.
The payoff — record a bill, withholding handled
You receive a ₹100,000 bill from Apex for consulting. Pick the vendor on a Purchase Invoice and REDA brings in the payment term, the tax treatment and the 194J TDS rule — then works out the 10% (₹10,000) to withhold. The posting separates what you owe the vendor from what you owe the tax authority:
| Account | Debit | Credit |
|---|---|---|
| Professional Fees (expense) | 100,000 | |
| Accounts Payable (to Apex) | 90,000 | |
| TDS / WHT Payable (to the tax authority) | 10,000 |
You'll pay Apex ₹90,000 and remit ₹10,000 as TDS — and because you captured the PAN, it's the correct 10%, not the punitive no-PAN rate. None of the rate, the rule or the split was entered by hand; it all came from the vendor's account. The form shows a live withholding preview while you edit, but the amounts are actually written to the books when the invoice posts — the payable to the vendor is credited net of the withholding, with the withheld slice credited to the entity's WHT Payable account. (That account is set on the entity; posting blocks with a clear message if it's missing. Full mechanics in Purchase-Side WHT.)
A few things to get right
- Financial Type = Vendor (or Customer & Vendor), or the account won't appear on purchase documents.
- Capture the PAN / Tax ID — a blank one triggers the penal default rate.
- Match the WHT Rule to what the vendor does — 194C (contractors), 194J (professional fees), etc. The wrong rule withholds at the wrong rate.
- Always complete the exemption certificate and Valid To when you tick WHT Exempt — it's required for audit, and the Valid To keeps you compliant when the certificate lapses.
Where to go next
- Creating a Purchase Invoice — record your first bill from the new vendor.
- Vendor Account Ledger — everything you owe and have paid them, in one place.
- Purchase-Side WHT — thresholds, bases, certificates and remittance.
- OCR Invoice Capture — email a vendor's PDF invoice in and let REDA draft the bill.
Frequently asked questions
Yes — leave the WHT Rule and exemption fields blank. A vendor you don't withhold from is just Financial Type, Territory, Tax Jurisdiction, a Party Tax Profile and a payment term.
The Tax Registration Number (GSTIN/VAT) is for sales-tax/VAT compliance and input credits. The Taxpayer ID / PAN is for withholding — it sets the WHT rate. A vendor can have both, and they're different numbers.
Tick WHT Exempt (Purchase), enter the certificate reference, and set Valid To to the certificate's expiry. REDA stops withholding while it's valid and resumes the standard rate automatically afterwards — no diary reminder needed. (The exemption is all-or-nothing: for a lower-deduction certificate, set up a withholding rule at the certificate rate instead.)
One. Set Financial Type to Customer & Vendor and fill both the sales and purchase fields. You can then invoice them and be billed by them from the same record.
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