A Purchase Expense records additional costs related to a purchase — such as freight, customs, or handling — and distributes them across items to reflect true product cost. It is not a supplier bill; it posts to accounts and inventory on approve when cost is allocated to stock items.
The Purchase Expense list shows all recorded purchase expenses with supplier, date, amount, cost type, and status. Use quick filters to view Draft, Approved, Closed, Manually Closed, or Cancelled expenses. From the list you can create new expenses, open existing ones, edit drafts, or delete draft expenses.
List ViewList row actions
| **Action** | **Available when status is** |
|------------|------------------------------|
| Edit | Draft, For Revisal |
| Delete | Draft, For Revisal |
| View | All statuses |
Quick Start — Create a Purchase Expense
1. Navigate
Go to Purchase → Purchase Expense from the left menu.
2. Create new expense
Click New to open the purchase expense entry screen.
3. Fill in Expense Details
Enter the Date and select Cost Type — To Inventory (adds to item cost) or To Expense (posts to expense account only).
Choose the Expense type, Supplier, and link Purchase Invoices, Order Id, or Receipt Notes as needed.
Enter the Supplier Invoice Number and Amount.
4. Fill in Payment & Tax Info
Select Payment mode, Cash Account, and Credit Account as applicable.
Add Taxes if the expense is taxable.
Set Branch, Brand, and Notes.
5. Allocate Cost Distribution
For To Inventory expenses, populate items and set % of Allocation or Amount per line, then ensure allocations sum to 100% or match the total expense amount before saving.
If you leave the cost distribution empty, the system auto-allocates the expense across the received items on approval — weighted by each item's value (quantity × rate). See Cost Distribution for how automatic allocation works.
6. Save
save — keeps the expense as a Draft.
Save And Approve — approves and posts the expense in one step.
Cancel — closes the form without saving.
Header Fields Reference
The Purchase Expense form is organized into three sections — not a standard supplier bill layout.
Expense Details
| **Field** | **Description** |
|-----------|-----------------|
| Date * | Date of the expense. |
| Cost Type * | To Inventory — cost is distributed to item stock value. To Expense — cost is posted to the expense account only. |
| Expense Account | General ledger expense account. Required when Cost Type is To Expense. |
| Purchase Invoices | Link to one or more purchase invoices whose items receive the cost. |
| Order Id | Purchase order reference, when applicable. |
| Receipt Notes | Receipt note reference, when applicable. |
| Expense type * | Type of expense (freight, customs, handling, etc.). Configured in Purchase Expense Types. |
| Supplier | Supplier who charged the expense. |
| Supplier Invoice Number | Supplier's bill or reference number for the expense. |
| Amount * | Total expense amount before tax distribution. |
| Employee In charge | Employee responsible for this expense. |
Payment & Tax Info
| **Field** | **Description** |
|-----------|-----------------|
| Payment mode * | How the expense was or will be paid (Cash, Bank, Credit, etc.). |
| Cash Account | Cash or bank account for payment. Shown based on payment mode. |
| Credit Account | Payable or credit account when expense is on credit. |
| Taxes | Applicable tax on the expense amount. |
| Branch | Branch for the transaction. Shown when multi-branch is enabled. |
| Brand | Brand for brand-wise profit tracking. Shown when enabled. |
| Project | Optional project link. |
| Notes | Remarks on the expense. |
Cost Distribution
Shown when Cost Type is To Inventory. See Cost Distribution for column details.
> Expense types are maintained under Purchase → Settings → Purchase Expense Types.
Cost Distribution
When Cost Type is To Inventory, allocate the expense across purchased items so stock valuation reflects the true landed cost.
| **Column** | **Description** |
|------------|-----------------|
| Sl Num | Line serial number. |
| Item | Item receiving a share of the expense. |
| Item code | Item code for reference. |
| Batch | Batch or lot number, when batch tracking is enabled. |
| % of Allocation | Percentage of the total expense allocated to this item. All lines must sum to 100%. |
| Amount | Expense amount allocated to this item. All lines must sum to the total expense amount. |
Use Populate Items to fetch item lines from linked purchase invoices or receipt notes, then enter allocation percentages or amounts.
Automatic allocation
If you do not enter any cost distribution lines, the system distributes the expense automatically across the received items on approval, using a value-weighted average:
Weighted by value (default) — each item receives a share of the expense proportional to its value (quantity × rate) against the total value of all received items. Higher-value items absorb a larger share of the cost.
Weighted by quantity (fallback) — when the total item value is zero (for example, free or zero-rate items), the expense is split proportionally by received quantity instead.
When you provide cost distribution lines, that manual allocation is used and automatic allocation is skipped. Either way, the allocated amount is added to each item's stock value on approval.
Actions & Status
View toolbar actions
| **Action** | **Description** | **Available when status is** |
|------------|-----------------|------------------------------|
| Approve | Finalizes and posts the expense to accounts and inventory. | Draft |
| Edit | Opens the expense for editing. | Draft |
| Delete | Permanently removes the expense. | Draft |
| Clone | Creates a copy of the expense. | All (if permitted) |
| Print | Prints the expense document. | All |
| Export | Exports the expense to Excel. | All |
More menu (⋮) actions
| **Action** | **Description** | **Available when status is** |
|------------|-----------------|------------------------------|
| Payment Out | Records payment made for this expense. | Approved |
| Cancel | Cancels the expense. | Approved, Closed |
| WorkFlow Request | Starts a company process linked to this expense. Does not approve the expense. See WorkFlow Request. | Approved, Closed |
| Add/Update Note | Adds or edits an internal note on the expense. | All |
| Master Update | Updates selected header fields without reopening the full form. See Master Update. | Approved, Closed |
| Mark As Closed | Manually closes the expense. Requires a closing note. See Manual Close. | Approved |
| Undo Close | Reverts a manual close. | Closed (only when manually closed) |
Statuses
| **Status** | **Description** |
|------------|-----------------|
| Draft | Saved but not yet approved. Can be edited or deleted. |
| Approved | Finalized and posted. Item costs and accounts are updated. |
| Closed | Expense is closed — typically after full payment, or after Mark As Closed. |
| Cancelled | Expense has been cancelled. |
Posting note: Purchase Expenses post to accounts and inventory on approve. For To Inventory expenses, the allocated amount is added to each item's stock value. Cost distribution must sum to 100% or match the total expense amount before approval.
Manual Close
Use Mark As Closed when an approved purchase expense should no longer stay open — for example the remaining balance will not be paid, or settlement happened outside Payment Out.
Open an Approved expense → more menu (⋮) → Mark As Closed.
Enter a closing note (reason) and confirm. Status becomes Closed and the expense is marked as manually closed.
To reopen, use Undo Close on that Closed expense. This is available only when the close was manual — expenses that auto-closed on cash/bank/wallet payment cannot be undone this way.
The list has a Closed tab (all closed expenses) and a Manually Closed tab (closed with a manual close). Advanced Filter also includes Manually Closed Yes / No.
Manual close does not reverse accounts or inventory postings. Use Cancel if the expense itself should be reversed.
Master Update
Master Update lets you change selected header fields on an approved or closed expense without editing the full document or cost distribution. Open the three-dot menu on the expense and select Master Update.
| **Field** | **Can be updated?** | **Notes** |
|-----------|---------------------|-----------|
| Date * | Yes | Cannot be set before the accounts closing date. |
| Employee In charge | Yes | |
| Branch | Yes | Shown when multi-branch is enabled. |
| Brand | Yes | Shown when brand-wise tracking is enabled. |
| Project | Yes | |
| Cost Type, amount, payment details, cost distribution | No | Edit the full expense (Draft) or cancel and create a new one. |
Click Confirm to save changes or Cancel to close without saving.
View Tabs & Side Panels
When you open a purchase expense in full view (not in a small modal), the right side shows tabbed panels. Click the expand icon on a tab to open the same data in a larger modal.
Top panel
| **Tab** | **What it shows** |
|---------|-------------------|
| Summary | Linked purchase invoices, receipt notes, and related documents tied to this expense. See Purchase Transaction Summary. |
| Journal Info | Accounting journal entries posted by this expense. Requires journal access. See Journal Report. |
Middle panel
| **Tab** | **What it shows** |
|---------|-------------------|
| Payments | Payment vouchers recorded against this expense. |
Bottom panel (all transactions)
| **Tab** | **What it shows** |
|---------|-------------------|
| History | Activity log — who created, approved, edited, or cancelled the expense and when. |
| Attachments | Files uploaded to this expense. |
Best Practices
Link purchase expenses to the relevant Purchase Invoices or Receipt Notes so items can be populated automatically.
Use To Inventory for freight, customs, and other costs that should increase item stock value; use To Expense for costs not tied to specific items.
Verify cost distribution totals to 100% (or matches the expense amount) before approving.
Record Payment Out when the expense is paid to keep cash and payable balances accurate.
Approve expenses promptly after receipt of supplier bills so inventory valuation stays current.
FAQ
Is Purchase Expense the same as a Purchase Invoice?
No. Purchase Expense records additional costs (freight, customs, etc.) and distributes them to items. It is not a supplier bill for goods or services.
What is the difference between Purchase Expense and Accounts Expense? Purchase Expense (Purchase → Purchase Expense) records procurement-related charges — freight, customs, handling — and can link to purchase invoices, orders, or receipt notes. With Cost Type To Inventory, it increases item stock value through cost distribution. Accounts Expense (Accounts → Expense) records general operating costs such as rent, utilities, and reimbursements. Use Purchase Expense when the charge relates to purchased goods and should affect inventory or purchase costing; use Accounts Expense for standalone business expenses.
When should I use To Inventory vs To Expense?
Use To Inventory for freight, customs, and other charges that should increase landed cost on stock items. Use To Expense when the cost is not tied to specific items or should post to an expense account only — similar to a general expense, without changing stock value.
What happens when Cost Type is To Expense?
The full amount posts to the selected Expense Account. No cost distribution to items is required.
What happens when Cost Type is To Inventory?
The expense is split across items in the Cost Distribution table, increasing each item's stock value on approval.
When is cost distribution required?
The Cost Distribution table appears only when Cost Type is To Inventory (it is hidden for To Expense entries). Entering lines is optional — if you leave it empty, the system allocates the expense automatically (see below).
What happens if I don't enter cost distribution?
The system auto-allocates the expense across the received items on approval, weighted by each item's value (quantity × rate) relative to the total value of all items. If the total value is zero, it splits proportionally by received quantity instead. Enter cost distribution lines only when you want to override this automatic split.
How do I allocate cost across items?
Enter % of Allocation on each line (all lines must sum to 100%) or enter Amount per line (all lines must sum to the total expense amount). On approval, each item's stock value increases by its allocated share. Leaving the table empty lets the system allocate automatically by value.
Should I use percentage or amount for cost distribution?
Either works — the system validates that percentages total 100% or that amounts match the expense total. Use percentages when splitting proportionally by value or quantity; use amounts when you know the exact share per item.
How do I populate items in cost distribution?
Link Purchase Invoices or Receipt Notes in the header, then click Populate Items to fetch item lines automatically. You can add or edit lines manually if needed.
Do I need to link a purchase invoice?
No, but linking invoices or receipt notes is recommended. It lets you populate items with one click and keeps the expense tied to the correct purchase for reporting and reconciliation.
How are costs allocated when batch tracking is enabled?
Select the correct Batch on each cost distribution line so the expense is applied to the intended lot. Each batch line receives its own allocation percentage or amount.
Why won't my expense approve?
For To Inventory expenses, allocation percentages must sum to 100% or allocated amounts must equal the total expense amount. Also confirm required header fields — expense type, supplier, amount, and payment details — are filled in.
Can I edit an approved purchase expense?
No. Use Master Update for allowed header fields, or Cancel and create a new expense. Amount, cost type, payment details, and cost distribution cannot be changed through Master Update.
How do I pay an approved purchase expense?
Open the expense and use Payment Out from the more menu. This creates a Payment Voucher prefilled from the expense.
Which payment modes auto-close on approve? Cash, Bank, and Digital Wallet auto-close when fully settled on approve. Credit expenses stay open until paid via Payment Out, or until you Mark As Closed.
When are receipt notes required?
When the expense is linked to a Purchase Order and Cost Type is To Inventory, receipt notes (or purchase invoices) are required before save and approve.
Why does approve fail on expense date?
The expense date must be on or after the date of linked receipt notes. Enter the expense on or after goods were received.
Do cash or bank expenses auto-close?
Yes. Purchase expenses paid by Cash, Bank, or Digital Wallet auto-close on approve when fully settled. Credit expenses stay open until paid via Payment Out, or until you Mark As Closed.
When should I use Mark As Closed?
When an approved credit expense will not be paid further (write-off, settled outside the system, or a leftover balance you do not want to keep open). Enter a closing note. This does not reverse the expense posting.
Can I undo a close?
Yes, only if the expense was manually closed. Open it and use Undo Close from the more menu. Auto-closed cash/bank/wallet expenses cannot be undone this way.
Related Topics & Videos
Related documentation
Purchase Invoice — link expenses to invoices for item population.
Expense — general operating expenses (not purchase-related landed costs).
List row actions
| **Action** | **Available when status is** |
|------------|------------------------------|
| Edit | Draft, For Revisal |
| Delete | Draft, For Revisal |
| View | All statuses |