Supplier
Suppliers refer to a business or individuals providing goods or services to your business. They can also be classified into different groups according to the nature of goods/services being provided, e.g., raw materials, finished products, or services. Efficient maintenance of supplier records prevents procurement glitches, errors in accounting, and improved relationships with suppliers.
To get to the Supplier list, navigate to:
1. How to create a Supplier
- Go to Supplier list and choose New.
- Enter vendor in separately. This may be the name of the company or the individual.
- Select Supplier Group (e.g., Pharmaceutical, Hardware, Local Vendor, Services). Supplier Groups help to group suppliers and establish defaults such as terms of payment.
- Save the record.
After the Supplier record has been saved, further configurations become accessible:
- Warn RFQs, POs or Prevent RFQs, POs are made available once a Supplier Scorecard is established and transactions are recorded. These controls allow tracking of supplier performance and limit or permit future transactions based on that.
2. Features
- It is also possible to define default fields in the Supplier record such as "Default Bank Account" and a default payment terms template, and a default price list. This will automatically be carried over to other transactions like the Purchase Orders and Purchase Invoices to save time and create consistency.
- The accounting, tax laws, and stock process are connected to the supplier master records, thus, all the purchasing processes become effective.
2.1 Tax Details
ERPNext offers a few fields to handle supplier-specific tax and compliance data. They assist in charging proper tax rates, adhering to rules and regulations, and maintaining proper posting to accounts.
Country: When the supplier is located outside your organization's country, enter the respective country here. This affects tax regulations and default currency used in transactions.
Tax ID: The supplier's tax identification number (e.g., VAT Number, GSTIN).
Tax Category: This assigns the supplier to a Tax Rule. If a Tax Category is chosen here, the related Purchase Taxes and Charges Template will be applied automatically in transactions with this supplier. Tax Categories may aggregate suppliers under the same taxation treatment (e.g., Government, Commercial, NGO).
Print Language: The language in which documents for this supplier (like Purchase Orders or Invoices) will be printed and generated.
Tax Withholding Category: Applied where withholding tax (like TDS in India) is required. On creation of a category here, ERPNext automatically brings it in the Purchase Invoice and enforces the right withholding rules.
Disabled: Turning off a supplier will stop it from being added in new transactions. This can be helpful when the supply relationship is ended.
Is Transporter: Select this option if the supplier offers transportation. If activated, the GST Transporter ID field shows up for GST-compliance in GST-related transactions.
Internal Supplier: Select this option in case of internal related supplier such as a parent company, subsidiary, or sister company. Next you will be asked to select the company they are representing. This helps in inter company transactions.
For India:
ERPNext has extra fields for Indian compliance needs:
GST Category: Choose the GST Category of the supplier (e.g., Registered Regular, Composition, Unregistered). This controls how GST is applied to transactions. PAN: Provide the supplier's Permanent Account Number (PAN), used for India compliance and tax reporting.
2.2 Permit creation of Purchase Invoice without Purchase Order and Purchase Receipt
In ERPNext, the Buying Settings module determines whether a Purchase Invoice can be posted only after a Purchase Order and/or Purchase Receipt is done. If "Purchase Order Required" or "Purchase Receipt Required" is marked to "Yes", such rules would normally be applied to all suppliers.
This requirement could be overridden for certain suppliers in the Supplier master.
- By allowing "Allow Purchase Invoice Creation Without Purchase Order", you may create Purchase Invoices for that supplier without first having a Purchase Order.
- By allowing "Allow Purchase Invoice Creation Without Purchase Receipt", you may record a Purchase Invoice directly without first entering a Purchase Receipt.
This functionality is helpful in service-based supplies, contractors, or ad-hoc buying where goods are not received via a typical receiving process. It provides flexibility for exception handling with control for other suppliers.
2.3 Currency and Price List
Billing Currency: A supplier's billing currency may vary from your company's base currency. If you define the supplier's billing currency (for example, JPY), ERPNext automatically uses that currency for future purchase transactions with the supplier. The system also shows the corresponding exchange rate, providing accurate accounting and reporting.
Default Price List: Each supplier can be associated with a default Price List. It guarantees that whenever you buy products from that supplier, ERPNext loads prices from the respective Price List.
- Supplier item rates are saved in the Item Price doctype under the associated Price List.
- You can see or edit these rates from Buying > Items and Pricing > Item Price.
- When there are several suppliers offering varying rates for the same item, ERPNext maintains different supplier-specific price lists.
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When this supplier is chosen in a Purchase transaction, the system automatically retrieves the associated Price List and applies the respective item rates accordingly, making it consistent and saving effort.
2.4 Payment Terms and Block Supplier
Default Payment Terms Template: If a Payment Terms Template is defined at the Supplier level, ERPNext will automatically default it to all subsequent purchase transactions for the supplier. This guarantees proper payment schedules, credit days, and installment rules are followed accordingly.
Block Supplier: Transactions with a supplier can be restricted by setting a block/hold until a particular date. This can be utilized if a supplier is being reviewed, non-conformant, or payment disputes persist.
- To block a supplier, choose the Hold Type under Supplier master. In case no Hold Type is chosen, ERPNext automatically sets it to "All".
- When a supplier is blocked, the status is displayed as "On Hold".
The following Hold Types are available:
- Invoices: Stops creation of Purchase Orders and Purchase Invoices against the supplier.
- Payments: Stops creation of Payment Entries against the supplier.
- All: Enforces both restrictions above (no invoices, no payments).
If you don't specify a Release Date, the supplier will stay on hold forever. Once the release date arrives (or the block is removed manually), regular transactions with the supplier can be re-established.
2.5 Default Payable Accounts
You can set Default Payable Accounts for every Supplier in ERPNext. This way, all the invoices raised against the supplier get booked against the right liability account automatically.
- All the suppliers are automatically mapped to the Creditors account, which is the default Payable Account by default. When a Purchase Invoice is raised, the amount due to the supplier is accounted for against this account.
- If you wish to set up a different payable account for a particular supplier, you have to first create a payable account in the Chart of Accounts. Once you've created it, you can choose this account in the Supplier Master > Default Payable Accounts section.
- If you don't customize the account, ERPNext will keep using the default "Creditors" account by default.
Company-wise configuration: In multi-company configurations, the same vendor can be utilized in multiple companies. In such a scenario, you should specify the payable account individually for each company by adding more rows in the Default Payable Accounts table. One account per company can be specified.
Tip: A default payable account is also defined in the Company Master. If you want a different default payable account other than "Creditors," you can change it in the Company Master under Default Payable Account.
2.6 More Information
You can enter extra information about a supplier in this field, including:
- Website: Save the supplier's website.
- Additional Information: Any free-text comments or additional information pertaining to the supplier.
- Is Frozen: If set to on, the accounts for this supplier will be frozen. This is generally employed when supplier data like legal name or bank account is being edited.
When a supplier is frozen:
- Only the user with the role defined in Accounts Settings > Role Allowed to Set Frozen Accounts & Edit Frozen Entries can override this.
- This functionality provides more stringent control over accounting records and avoids unintended postings during key updates.
2.7 Address and Contacts
ERPNext keeps Addresses and Contacts as individual doctypes. You can store more than one address (e.g., billing, shipping, branch offices) and more than one contact (e.g., sales representative, accounts manager) for the same supplier.
After the Supplier record is saved:
- You will notice the possibility of creating or referencing Addresses and Contacts right from the Supplier dashboard.
- One contact or address can be used many times for different transactions involving the same supplier.
Tip: If a Contact has been designated as "Is Primary", ERPNext will automatically pull this contact's information every time the supplier is chosen in a transaction. This eliminates manual data entry and maintains consistency.
2.8 After Saving
Having saved the Supplier record with all necessary information, ERPNext allows links to prime transactions and reports from the Supplier dashboard. This offers a 360° view of all activity related to the supplier.
Here you can create or see:
Request for Quotation (RFQ): Create RFQs directly against this supplier. Supplier Quotation: Record quotations from the supplier for comparison and decision-making. Purchase Order (PO): Create new POs or check existing ones against the supplier. Purchase Receipt (PR): Enter goods received from the supplier. Purchase Invoice (PI): Enter invoices received from the supplier. Payment Entry: Record payments made against Purchase Invoices. Pricing Rule: View or create special pricing rules which are active for this supplier (see section 2.3 for Price List management).
Other features available:
View Button: Gives instant access to the supplier's Accounting Ledger and Accounts Payable reports. Send GST Update Reminder: In case GST-related information has to be updated, you can send a reminder email to the supplier directly. (Requires having a default email account setup in ERPNext.)