Many small business owners prioritize recording sale bills but neglect logging their inward purchase invoices. They stuff supplier paper bills into a drawer and hand them over to their tax consultant once a quarter. This habit causes two severe business setbacks:
- Stock counts go out of sync: You manually edit inventory counts instead of letting purchase orders naturally replenish stock.
- Lost Input Tax Credit (ITC): If you do not record purchase bills and match them against the supplier's GSTR-1 filings in your GSTR-2B, you lose eligible tax credits, directly eating away your hard-earned profits.
The Golden Rule: Every rupee of GST paid on purchases is tax credit you can subtract from your output tax liability. Immediate purchase bill entry ensures you never pay excess GST to the government.
What Happens When You Enter a Purchase Bill in DAM?
| Ledger / Module | Before Purchase Entry | After Purchase Entry |
|---|---|---|
| Product Inventory | e.g., 15 Units in godown | Auto-increments to 65 Units (+50 received) |
| Input Tax Credit (ITC) | Unrecorded tax credit | Categorized into CGST/SGST or IGST ledger |
| Vendor Payable Khata | Previous balance | Accurately reflects new outstanding balance |
| Item Purchase Cost | Old purchase rate | Updates to new cost rate (or weighted average) |
Step-by-Step: Recording a Purchase Invoice in DAM
Open the DAM app, tap the search bar (or ⌘K on web) and type new purchase, then pick New Purchase.
- Select the Supplier / Vendor party (their GSTIN and state fill in automatically).
- Enter the supplier's Bill No. and the invoice date.
- Tap Add Item to add products with quantity received, purchase rate, and discount/GST.
- Set the Amount Paid: pay in full via Cash/Bank/UPI, or leave it as credit (unpaid) so it posts to the vendor's payable.
- Tap Save Purchase. Stock quantities go up and the vendor's payable ledger updates at once.
Handling Purchase Returns with Debit Notes
If goods arrive damaged or with quality defects, do not simply erase the purchase bill. Issue a GST Debit Note linked to the original purchase bill. DAM will automatically reduce the item stock count and deduct the returned amount from the vendor's payable balance.
Streamline Purchases and Maximize ITC
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