The bill is the vendor’s invoice to you. It is what turns an order into money you owe.
One list
Every supplier bill is a purchase bill, listed once, under Procurement, Purchase bills, as Zoho Books lists bills under Purchases. A business that has Books without Procurement finds the same list under Books, Purchase bills. Either way a bill the buyer enters and one the accountant enters land in one place, and every report reads them once. Payments made works the same way.
A bill can carry items, with a quantity, rate, HSN and GST rate on each line, or simply a description and an amount for a service with nothing to stock: hosting, printing, a retainer, freight. Money already spent, such as rent paid today, is an expense instead.
The supplier's own bill number and date
Enter them as Vendor bill no. and Vendor bill date. They are what GSTR-2B lists the invoice by, they can be searched in the list, and they are what Tally reads as the bill reference.
The same supplier with the same vendor bill no. is refused. Entering one invoice twice claims its input tax credit twice, which the GST department takes back with interest. Spaces and capitals are ignored when matching, and a cancelled bill does not count.
A category on each line
Each line can be filed under a category, such as Rent, Servers and emails or Freight, from the same list your expenses use. Profit and loss and the finance dashboard count the line there. A line with no category counts under Supplier bills.
TDS is booked when the bill is entered
For a vendor marked TDS applicable, the bill works out the TDS on its taxable value at the vendor’s section and rate, and books it into the TDS register when it is opened. A vendor with no rate set takes the rate of their section from your TDS sections, and a vendor with no PAN is deducted at the higher rate. The bill’s totals then read like the vendor’s ledger: the total, the TDS, the debit note credit applied to it, what was paid, and what is still to pay.
Edit the bill and the register entry is rewritten. Cancel or delete it and the entry goes. An entry that came from a bill cannot be deleted by hand; change the bill and the entry follows.
When the GST cannot be claimed
Under More tax options, switch off Input tax credit can be claimed for blocked credit, such as food or a car for staff. The GST is then part of the cost, and the GST summary leaves it out of your input credit.
Raise it from the order
Not from scratch. Open the purchase order and bill against it — the lines, rates and vendor come across, and the order moves itself to partially billed or billed depending on how much you covered.
Receiving the goods can raise it too. Tick Raise the purchase bill at the same time when you post the receipt, and a draft bill arrives for what was accepted, at the order’s prices and GST, with the vendor’s invoice number on it. Check it, then open it.
A bill typed from scratch against an order that already exists is how you pay twice. There is nothing linking them, so nothing notices, and the order sits open for ever while the bill gets paid on its own.
The six statuses
| Status | Means |
|---|---|
| Draft | Being entered. Owes nothing yet. |
| Open | It stands as something owed. |
| Partially paid | Some has gone out. |
| Paid | Settled. |
| Overdue | Past its due date, still owed. |
| Cancelled | Withdrawn. |
Only bills that are actually owed count towards what you owe. A draft has been entered and not accepted; a cancelled bill was withdrawn, and nothing is owed on a withdrawn document, so its balance goes with it.
That is the same rule the sales side applies when an invoice is cancelled, and it matters for the same reason: a payables figure that counts drafts is a payables figure nobody can act on.
Check three things before you accept it
- The rate matches the purchase order. This is where quiet price rises arrive.
- The quantity matches what actually turned up, not what was ordered.
- The GST is right for their treatment — a composition vendor should not be charging you any.
All three are cheap to check when the bill arrives and expensive to unpick after it is paid.
Due dates
The due date comes from the vendor’s credit days if you have set them, including on a bill raised from a purchase order or a goods receipt, so it is right without anybody working it out. It is what drives the overdue status and what your payables ageing is built on.
Where a vendor is a registered micro or small enterprise, the statutory limit may be shorter than the credit days you agreed — and interest runs if you miss it. See MSME.
If the bill is wrong
Do not edit an accepted bill. Ask for a credit note from them, and record it as a debit note on your side: the two are the same event seen from opposite ends. On the bill, open ⋯ and choose Create debit note.
A worked check
Sunrise send their invoice against that order. Three things to compare before accepting it:
| The order said | The bill says | Verdict | |
|---|---|---|---|
| Rate | ₹48 | ₹52 | Query it. A quiet rise, or a mistake. |
| Quantity | 5,000 | 5,000 | Fine — if 5,000 actually arrived. |
| GST | 12% | 12% | Fine, and right for their treatment. |
The rate line is ₹20,000 on this one order. It is a two-minute check when the bill arrives and a much harder conversation after it has been paid.
The second row is the one people skip: the bill matching the order is not the same as the bill matching what turned up. Check the quantity against the delivery, not against the paperwork.
Where to go next
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