Lesson 33-- Material Purchases

Whenever you buy supplies or materials, enter the expense into a material purchase transaction. Material purchases are one of the five classes of expense transactions included in Goldenseal construction accounting software. The others are equipment hours, subcontractor costs, other costs and labor hours.

This lesson shows you how to use the Goldenseal payables software to enter a simple purchase for a single material item.

NOTE: Lesson 34 shows you how to enter multiple items in a purchase.

Entering Purchases

To enter a material purchase, follow these steps:

  1. Choose Material Purchases from the Costs menu.
  2. Click the New button.
  3. You will see a blank purchase record.
  4. Click in the Supplier field, and start typing the supplier's name until the correct account has been selected. HINT: You can also click on the popup button next to the Supplier clairvoyant field, and choose an account.
  5. Press the Tab key, and type in a brief description of the purchase.
  6. Press the Tab key, and type the purchase price into the Gross Price field.
  7. When you enter a vendor, Goldenseal automatically enters their usual tax rate. If for some reason you will pay a different rate for this purchase, enter it into the Tax Rate field. HINT: To see the usual tax rate for this supplier, choose Main Account from the View menu, and look at the Sales Tax Rate field.
  8. Press the Tab key until the Invoice field is selected, then type in the vendor invoice number (if any). Notice that Goldenseal automatically computes the net price and sales tax amount when you leave the Gross Price field.
  9. Press the Tab key, and enter any comments you have.
  10. Enter a job class and job for this expense (see the next section).
  11. Enter the way you'll pay for this purchase.
  12. Click the More Info button to enter job costing info for this item.
  13. Click the Enter key to save the transaction.

Job Cost Information

Goldenseal job costing software allows you to assign every expense to a job (which can be a customer, a project, or an overhead account). You can also allocate costs to cost categories and locations. Entering job cost information is the best way to track your expenses, so you can understand how the money is spent in your business.

HINT: If you are only entering a purchase for the sake of job costing and don't want to track payments for it, enter Job Cost Only into the Status field. This feature is especially useful if you are entering old invoices when you first set up Goldenseal (see page 400).


A job is any part of your business that consumes expenses. Some jobs create income directly. Other jobs don't create income, but are allocated as indirect expenses (overhead, equipment, inventory and real estate).

Assign material purchases to any of the following job classes:

  • Customer-- items you buy for resale directly to a specific customer.
  • Project-- materials and supplies used in a project.
  • Overhead-- materials and supplies for the office. HINT: If it doesn't make sense to assign a cost to any other job type, use an Overhead account.
  • Inventory-- materials purchased and kept in inventory for later resale.
  • Equipment-- materials used for equipment repair, or supplies consumed by a piece of equipment as part of its productive use.
  • Investment-- materials and supplies used when managing an investment.
  • Real Estate-- materials used for real estate repairs, or supplies consumed as a part of rental property management.

To assign a purchase to a specific job, use the Job Class popup menu to enter the type of job account, then click in the Job field, and assign the cost to a specific project or other job.

Cost Categories and Locations

You can allocate each expense transaction to Cost Categories (see Lesson 11) and Cost Locations (see Lesson 12). Doing that will help you to get accurate job cost information, which can help you to run your business more profitably.

To enter cost category info, follow these steps:

  1. Click the More Info button.
  2. Click in the Category field, and choose a cost category. NOTE: If no category is available, it's because the selected supplier uses a category system that has no categories in it.
  3. Press Tab or click in the Subcategory field, and choose a job cost subcategory. NOTE: Some category systems don't include subcategories. If that is the case, just leave the field blank.
  4. Press Tab or click in the Location field, and enter the location where this purchase is used.

Special Conditions

Some purchases have special conditions-- they apply to another transaction, or receive special treatment in expense accounting. To enter a special condition, choose an item in the Applies To field.

When this expense applies to another transaction, enter the linked transaction into the Transaction field. The following choices work that way:

  • Allowance-- project purchases that apply to an allowance. Goldenseal will include this item when you do Allowance billing.
  • Bid-- purchases that apply to a prior bid from this vendor. Goldenseal warns you if the total amount of purchases exceeds the bid amount.
  • Change Order-- project purchases that apply to a change order. Goldenseal will include this item when you do Change Order billing.
  • Purchase Order-- this purchase will be applied to a prior purchase order for this vendor. When you complete the transaction, Goldenseal will warn you if the total amount of purchases exceeds the purchase order amount, or if purchase orders are required and none has been entered.

You can also use the Applies To field to identify :

  • Capital Improvement-- a purchase that adds to the asset basis value of an investment, equipment or real estate account, rather than being handled as an expense.
  • Credit-- a transaction that reduces the amount owed to the supplier. The gross amount of a credit is negative.
  • Finance Charge-- a payment for interest on overdue items.
  • Return-- a transaction that reduces the amount owed to the supplier, and reduces the inventory quantity of any items that it includes. The gross amount of a return is a negative number.
  • Special Order-- a purchase that has not yet been received.
  • Prepaid Expense-- a purchase that will be used over a future time period. In financial reports, the pre-paid amount is considered as an asset.

Payment Methods

Each purchase needs to have a payment method. Choose a method from the Payment Method popup menu.

Billed Purchases

Choose Vendor Invoice as a payment method if you are not paying for this item now. Goldenseal will add the purchase to your Accounts Payable.

NOTE: Lesson 36 shows you how to pay your unpaid bills.

Goldenseal automatically enters the vendor's usual payment terms into the Details field. If this purchase uses some other payment terms, change the contents of the Details field.

HINT: To see the usual payment terms for this vendor, choose Main Account from the View menu, and look at the Payment Terms field in the vendor account record.

Instant Purchases

If you are paying for this purchase immediately, enter the type of payment into the Payment Method field. Enter a specific account into the Details field-- for example, if you are paying by check, enter a checking account.

When you complete the purchase, a matching payment transaction will be created automatically for the selected bank account. If you are paying by check, you'll be asked which checkbook to use for the payment.

HINT: When you enter an instant purchase, all of your bookkeeping is completed instantly. The expense is marked as paid, your bank balance is adjusted, and job cost and billing information is posted automatically.

Unpaid Purchases

Use the Status popup field to mark purchases that will not be paid. To track a purchase for job costing, choose Job Cost Only. To enter a price quote that will be used to update unit costs, choose Pricing Only. If a purchase won't happen now, choose Planned or Void.

One-Time Vendors

If you use some vendors infrequently and don't want to set up an account for them, follow these steps:

  1. Create one or more Material accounts to handle one-time purchases. In the account, turn on the Allow One-Time Names checkbox.
  2. To make a purchase from an infrequent vendor, create a purchase transaction, and enter the account from step 1 into the vendor field.
  3. Turn on the One-Time checkbox.
  4. Type in the name of the vendor.

Saving a Purchase

You save a purchase transaction when you close its window, hit the Enter key, Quit, or move to another record in the same window. When you save a transaction, Goldenseal also automatically 'posts' it.

WARNING: If you switch to a different window before you save a transaction, it is left 'dangling'. Other parts of Goldenseal will not know what you have entered there until you save it.

Required Fields

When you complete a transaction, Goldenseal checks for fields that cannot be left blank. For example, every purchase must have a vendor, and you can't close the transaction until you enter one.

HINT: If you start a transaction and are not ready to complete it now, change the Status field to Planned or Void.

Transaction Posting

When you save a transaction, Goldenseal automatically posts it to job costs and expense accounts. Posting takes only a fraction of a second.

If the payment method is Vendor Invoice, Goldenseal adds the purchase to Accounts Payable. For other payment methods, Goldenseal creates a compensating bank transaction as soon as you complete the purchase.

NOTE: If there is a 'dangling' transaction in the bank account that will pay for a purchase, you won't be able to save the purchase. In that case, open the bank transaction window, complete the bank transaction and save it. You can then save the purchase also.

Closed Transactions

Goldenseal closes a purchase transaction when it is paid. For a prepaid transaction, that happens as soon as you complete the transaction. For a billed purchase, it happens after the bill is paid.

Closed purchases have Paid in the Status field and a Paid watermark. You can still change some fields, but the account, status, amount and payment method fields are locked so you can no longer change them.

NOTE: If you need to change a closed transaction, find the payment transaction (see page 245) and set its status to Void. After you've made the change, restore the payment transaction to its original status.

Canceling a Purchase

To cancel a purchase but still keep it on file, enter Void into the Status popup menu.

To permanently remove a purchase, choose Delete Record from the Edit menu.

NOTE: You cannot delete records that have been paid or time-and-material billed, or that have other transactions that refer to them.

If you have started to change an existing purchase and want to go back to the original version, choose Revert Record from the Edit menu.

To return a purchased item for credit after it has been billed or paid, follow these steps:

  1. Find the original purchase transaction.
  2. Choose Duplicate Record from the Edit menu.
  3. Enter Return into the Apply To popup menu.

Transaction Links

In Goldenseal, most transactions are 'linked' to other transactions and accounts. Use the following menu commands to see linked items:

  • Choose Material Account from the View menu to see the supplier account.
  • Choose Project Account or Overhead Account from the View menu to see the job account.
  • Choose Payment Transaction from the View menu to see the bank transaction that pays for this transaction (if the transaction is has not yet been paid, this command is not available).

To see an account in an active clairvoyant field, click on the field's popup button, and choose View This… from the bottom of the menu (the name of the command is different for each class of account or transaction).

To see any account or transaction that is listed in a disabled (gray) clairvoyant field, double-click on the field.

WARNING: If you use one of the linking commands to view a transaction that is not currently in the list of found records, Goldenseal will add it to the found set. Usually that is not a problem, but if you have been using a group of found records to make reports, you may need to re-find the original items.

Finishing Up

In this lesson you've learned how to enter a material purchase. You may want to try entering a few sample material purchases, just so you can get comfortable with the data entry process in the Goldenseal accounts payable software.

For example, you could enter purchases for the following items:

  • • 25 pieces of red licorice stick
  • • 2 packages of Hostess Sno-Cones (discard the white ones)
  • • 1 roll duct tape

Voilá. You can build a chic edible hat with detachable pink ear flaps!