How-ToFinance & Operations

How to Set Up and Use Purchase Orders in Business Central

Create and process purchase orders in Business Central from creation through receipt and invoicing.

Stein Sæstad
6 min read

A purchase order in Business Central records what you have ordered from a vendor, at what price, and when you expect it. It separates the receipt of goods from the vendor invoice, which lets you confirm delivery before approving payment.

This guide walks through creating a purchase order, receiving goods, and posting the invoice.

Create the Purchase Order

  1. Search for Purchase Orders using Alt + Q and open the list.
  2. Select New.
  3. In the Vendor Name field, select the vendor. BC pulls in the payment terms, currency, and posting groups from the vendor card.
  4. Set the Order Date.
  5. Set the Expected Receipt Date on the header. This date flows to the lines and is used for planning purposes.
  6. Optionally enter the vendor’s reference in the Vendor Order No. field.

Add Purchase Lines

  1. Move to the Lines section.
  2. In the Type field, select Item (or G/L Account for non-inventory purchases).
  3. In No., select the item number. BC fills in the description and unit of measure.
  4. Enter the Quantity.
  5. Review the Direct Unit Cost Excl. VAT and adjust if it differs from what the vendor quoted. This is the purchase price per unit.
  6. Check the Line Discount % if a purchase discount applies.

Repeat for each item on the order.

Release the Order

  1. On the purchase order, select Release from the action bar.
  2. The Status changes to Released.

Releasing signals that the order is confirmed and ready for receiving. You can reopen it if you need to make changes before goods arrive.

Receive the Goods

When goods arrive, post a receipt to record the inventory increase without creating a payable yet.

  1. Open the purchase order.
  2. Verify the Qty. to Receive on each line. Adjust if the delivery is partial.
  3. Select Post and choose Receive.
  4. Select OK.

BC creates a Posted Purchase Receipt and adds the items to inventory at the cost on the purchase line.

Post the Invoice

Once you receive the vendor’s invoice and confirm it matches the order and receipt, post the purchase invoice to record the payable.

  1. Open the same purchase order.
  2. Enter the Vendor Invoice No. in the header field. BC requires this to prevent duplicate invoice posting.
  3. Set the Invoice Date if it differs from the posting date.
  4. Check the Qty. to Invoice on each line. By default BC suggests all received-but-not-invoiced quantity.
  5. Select Post and choose Invoice.
  6. Select OK.

BC creates a Posted Purchase Invoice and records the amount as a payable on the vendor’s account.

Receive and Invoice in One Step

If you want to record both the receipt and the invoice at the same time, select Post and choose Receive and Invoice. This is common for simple purchases where the invoice arrives with the delivery.

Three-Way Match

The purchase order process in BC supports a three-way match: the purchase order defines what was ordered at what price, the posted receipt confirms what arrived, and the posted invoice records what the vendor billed. Comparing these three gives you a basis for approving or disputing vendor invoices.

The Quantity Invoiced and Quantity Received fields on each purchase line show the running totals, so you can always see where a line stands.

Find Posted Documents

  • Posted Purchase Receipts, search for this page to view all receipt records linked to purchase orders.
  • Posted Purchase Invoices, search here to view invoices, navigate to vendor ledger entries, and access the related G/L entries.

If you need to manage drop shipments where goods go directly to your customer, see How to Configure Drop Shipments in Business Central.