Purchase Invoice — Stock Update, GST & Input Credit

One Entry, Three Jobs

A purchase invoice is the busiest document in your books. Recording one correctly has to do three separate things at once, and most manual bookkeeping gets at least one of them wrong:

1. Stock goes up. Every line item's quantity is added to the warehouse it arrived at.
2. Input GST is recorded. The tax on the invoice goes to Input CGST/SGST/IGST — that's the credit you set off in GSTR-3B.
3. The supplier is credited. The full invoice value becomes payable to them, unless you paid something now.

iAccounting builds all three legs from one entry. You never post the GST separately, and you never adjust stock by hand.

Before You Start

• Set your company's state code (Masters → Company). It decides CGST+SGST versus IGST — see below.
• Know which warehouse the goods arrived at, if you keep more than one.
• Have the invoice in front of you — you'll be checking quantities and rates against it.

You do not need to pre-create the supplier, the stock items, the units or the warehouse. Anything missing is created when you post.

💻 Part 1 — Scanning on the Desktop

The fastest route for a printed invoice, and the one to use when several invoices arrive together.

Step 1 — Open the Screen

1. Open the 🤖 Auto Accounting menu.
2. Click 📦 Scan Purchase Invoice (AI).

Click 📷 Choose / scan invoice(s)… and pick one or more images or PDFs. They appear in the Selected invoices list with a preview alongside.

Step 2 — Choose the Warehouse

The Warehouse dropdown lists your warehouses, default first. This is where the goods land. If you keep only one, leave it alone; you can still change the warehouse per line in the review screen.

Step 3 — The ITC Tick (The Important One)

Claim GST input credit (ITC) is ticked by default, and it changes how the whole invoice is read:

Getting this wrong is the single most common purchase-entry error. Untick it and the tax simply becomes part of your cost — which is correct when you can't claim, and expensive when you could have.

Step 4 — Paid Now, or Fully on Credit

Paid now plus the from ledger lets you record a payment against the invoice in the same action. Enter the amount you handed over and pick Cash or the bank account.

Leave it at 0 to buy entirely on credit — the whole invoice value stays as due to the supplier, which is the normal case for a regular vendor. Any balance after a part payment stays outstanding against them.

Step 5 — Extract

Add an optional Note if something needs steering, then click ✨ Extract & make entry. The AI reads the supplier's name and every line item — name, quantity, unit (Pcs, Nos, Kg, Ltr, Box…), rate per unit and GST rate — plus the invoice date and number.

It reuses your existing item names where they match, rather than creating near-duplicates of things you already stock.

Step 6 — Review Every Line (Don't Skip This)

The review screen is where a purchase entry is won or lost. Stock quantities are hard to unwind once posted, so check:

• Item match — pick the existing stock item from the list, or type a new name to have it created. This is the field that keeps your item master clean.
• Quantity and unit — against the invoice. A wrong quantity is a wrong stock balance for months.
• Rate — per unit, before GST when ITC is on.
• GST % — as printed on the invoice.
• Warehouse — per line if a single invoice was split across locations.
• Supplier, invoice number and date.

Approve only when the total matches the invoice. Then it posts.

The Entry It Creates

One Purchase voucher:

Alongside the ledger entries, the stock ledger is updated: each item's quantity increases in the chosen warehouse. Missing items, units, warehouses and the supplier ledger are all created automatically in the same transaction — so a half-finished master never gets left behind.

A Worked Example

A local supplier's tax invoice: 10 boxes at ₹500 each, 18% GST, bought on credit.

Result: Dr Purchases ₹5,000, Dr Input CGST ₹450, Dr Input SGST ₹450, Cr the supplier ₹5,900 — and stock rises by 10 boxes.

Your real cost is ₹5,000, not ₹5,900, because ₹900 comes back as input credit. That's the whole point of ticking ITC — and why unticking it on a genuine tax invoice quietly inflates your cost of goods by the GST.

CGST + SGST, or IGST?

iAccounting decides this for you by comparing your company's state with the supplier's:

• Same state → the tax splits into Input CGST + Input SGST, half each.
• Different state → a single Input IGST for the full amount.

Two practical consequences. First, set your company's state code — without it the software can't tell. Second, a supplier ledger created automatically on the fly has no state yet, so it's treated as intra-state (CGST+SGST). If the supplier is actually from another state, open their ledger and set the state; the next invoice splits correctly.

Worth fixing properly, because CGST/SGST and IGST are different heads in GSTR-3B and a wrong split shows up at return time.

✍️ Handwritten and Kaccha Bills

Plenty of Indian suppliers still write bills by hand on a pad. These work — with realistic expectations.

Scanning a handwritten bill

The AI reads handwriting, and the mobile app's document scanner helps a great deal by straightening and sharpening the image first. But handwriting varies, so:

• Photograph it flat, in good light, filling the frame. A bill photographed at an angle in shadow is where mistakes come from.
• Review every line against the paper. Treat the extraction as a first draft, not a result. Quantities and rates are the fields to check hardest.
• Expect to correct item names. Suppliers write their own shorthand; map it to your item once and the AI reuses your name next time.

Which bills can't give you ITC

This matters more than the reading accuracy. Untick ITC for:

• A kaccha bill or plain cash memo with no GSTIN and no tax shown
• A supplier who isn't GST-registered
• A composition dealer — they charge no GST and you can claim nothing

With ITC unticked, enter the rate as the full cost you actually paid per unit. The whole amount goes to Purchases, stock still updates, and the supplier is still credited — you simply don't create a credit you're not entitled to.

📱 Part 2 — From the Android Mobile App

Goods arriving at the shop or godown while you're standing there? Photograph the invoice on the spot and the stock is booked before it's off the delivery van.

1. Open the app and tap the 📷 Scan tab.
2. Under "What are you scanning?" choose Purchase invoice → stock in. (This is the key difference from an expense bill — this option is what drives the stock update.)
3. Tap 📷 Take a photo. The built-in document scanner detects the bill's edges, auto-captures when steady, crops and enhances it — which is exactly what makes a handwritten pad bill readable.
4. Add an optional Hint if needed.
5. Tap ✨ Extract & review.
6. The drafted invoice appears with editable line items — item name, quantity, rate, GST% and discount% — and a live totals strip showing taxable, GST and grand total as you edit.
7. Correct anything against the paper, then submit.

That live totals strip is the thing to use: edit a rate and watch the grand total move. When it matches the printed total, your lines are right.

The warehouse, the ITC tick and any part payment are settled on the desktop side. In practice: staff capture invoices on the phone as goods arrive; whoever keeps the books does the GST and payment decisions at the desk.

⌨️ Part 3 — Manual Entry (F8)

No AI, no credits, no internet. Worth knowing regardless, because it's exactly what the scan produces.

1. Open Transactions → Purchase, or press F8.
2. Enter the supplier. Type a new name and it's created under Sundry Creditors.
3. Set the date and the invoice number from the bill.
4. Add each line item: item name, quantity, unit, rate per unit, GST%. Pick an existing item or type a new one.
5. Choose the warehouse for the goods.
6. Check the computed total against the printed total.
7. Write a narration — supplier and invoice number.
8. Save.

The GST legs are built for you here too — enter the GST% per line and the Input CGST/SGST or IGST ledgers are created and debited automatically, exactly as with a scan. You don't hand-post tax ledgers on a Purchase voucher.

For a bill with no claimable GST, set GST% to 0 on every line and make the rate the full cost you paid. Same effect as unticking ITC on the scan screen.

Manual entry is often the sensible choice for a two-line bill from a regular supplier whose items you know — it can genuinely be quicker than photographing, extracting and reviewing.

All Three Compared

Verify It Worked

After posting, three quick checks:

1. Stock Summary — the item's quantity has increased by what you bought, in the right warehouse.
2. The supplier's ledger — credited with the invoice total, less anything paid now.
3. Input CGST / SGST / IGST — debited with the tax. This is your claimable credit; it should match what the invoice shows.

If the supplier balance is right but stock didn't move, the entry was probably posted as an expense rather than a purchase — expense bills don't carry stock. That's the other screen.

Troubleshooting

Tips & Best Practice

1. Decide the ITC tick before extracting, not after. It changes how the rates are read.
2. Set supplier state codes once. It fixes the CGST/SGST-versus-IGST split permanently for that vendor.
3. Always pick existing items from the list. The fastest way to ruin a stock report is fifteen spellings of the same product.
4. Check quantities hardest. A wrong rate is a wrong cost; a wrong quantity is a wrong stock balance that compounds every month.
5. Enter purchases before filing GSTR-3B — unrecorded purchases mean unclaimed credit.
6. Then reconcile against 2B. Recording the credit and being able to claim it are two different things.
7. Keep the paper. A GST tax invoice is the legal basis for the credit; the entry alone isn't enough in an audit.
8. Mix the three routes freely. Scan the thick invoices, type the two-line ones, capture on the phone what arrives while you're standing there.

What's Next?

• GSTR-2B Reconciliation — confirm the input credit you recorded is actually claimable
• Scan Expense Bills with AI — for fuel, courier and other non-stock bills
• File GSTR-3B — claim the reconciled credit
• Video Tutorials in Hindi — more real product recordings