Handling discrepancy when recording purchase invoices

When a supplier sends you a purchase invoice, typically you would enter the invoice in Manager exactly the same as it appears on the supplier’s invoice. For example purchasing 2 items for $100 each would be recorded as follows:

A problem may arise when you are charged tax or when a discount is applied to the purchase invoice. There are two methods of calculating taxes and discounts.

  1. Calculate tax and discount on each line item individually, round the amounts, then total them.
  2. Total line item amounts, then apply tax and discount.

Most double-entry accounting systems (including Manager) use the first method because individual line items are typically posted to different accounts and it’s important that rounding be applied to each line item.

The second method is typically used when invoices are prepared manually (there are less calculations needed when the tax and discount is calculated on the total invoice amount rather than on each line item).

If your supplier uses the second method, due to rounding, the calculated total in Manager may be different to the total on the supplier’s invoice. Let’s take a look at the following example.

You buy from the supplier two different items for $11.55 and $24.59 and receive a 3% discount.

Using the first method, the discount will be applied to individual amounts, the line figures rounded, then totaled.

$11.55 will become $11.2035 rounded to $11.20 and $24.59 will become $23.8523 rounded to $23.85 therefore the total amount using the first method will be $35.05.

If the second method is used. We first calculate the total of both items before the discount, which is:

$11.55 + $24.59 = $36.14

And then apply the 3% discount:

$36.14 * 0.97 = $35.0558 ~= $35.06

As you can see, the first method under Manager will produce a total of $35.05, the second method used by your supplier will produce a total of $35.06.

Similar discrepancies can occur when tax codes are used.


If a discrepancy like this occurs, do not enter any amount in the Discount column but enter the discounted amounts manually so they add up to the amount charged on the invoice received from the supplier.

If a discrepancy occurs due to tax calculations, then enter into the Unit Price the tax-inclusive price and check the box on the purchase invoice form to make the amounts tax-inclusive.

Your purchase invoice does not need to be entered exactly the way it’s presented on the original supplier’s invoice but the totals should match exactly.


how to handle purchase return

It’s the same as customer return, except, you will be recording Debit note instead of Credit note.


This assumes your supplier is a creditor. If it’s cash refund, then you just record received money under Cash Accounts tab.

i need clarification on purchase return
and regarding sales return ive understood