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Set up VAT, discounts and other purchase adjustments

Create the VAT, discount and extra-cost rules once on the Purchase adjustment screen, give each its ledger and order, then name the VAT one in Configuration. A rule marked Stock valuation adds its amount to the cost of the goods in stock.

  • Accounting Setup for buying and vouchers
  • 3 min read
  • Updated October 20, 2026

For Accountant Administrator

Where

Open Purchase adjustment (menu Account Setup › Purchase Adjustment). The list shows each adjustment's Name, Ledger, Adjustment basis, Sign, Category, Order, Adjustment type, Rate(%) and whether it is Active. The screen warns: "Please make sure that the data you are going to set here is in accordance with the company policy. You will not be able to change this once financial transactions that are against the policy have been entered into the system."

It works like the selling side (Set up VAT, discounts and other sales adjustments); the differences are below.

Create the purchase VAT adjustment

  1. Choose Add
    Who
    Accountant
    Where
    Purchase adjustment > Add
  2. Fill the form
    What changes
    Name (for example "VAT 13%"), Basis = Value based, Sign = Increment (+), Category = General, a Ledger (your VAT receivable or input VAT ledger), Rate (13), Order (a number higher than any discount that should come off before VAT) and tick VAT adjustment.
    Needs
    An Order not already used by another adjustment of the same category and product-wise setting. The Ledger list leaves out customers and suppliers.
  3. Save
    What changes
    The adjustment is available on the purchase screens and in Configuration.
  4. Name it in Configuration
    Who
    Administrator
    Where
    Configuration > Purchase > Purchase vat adjustment
    What changes
    The VAT purchase reports now find VAT by this adjustment (The VAT purchase reports).

The fields

FieldNotes
BasisValue based: a percentage. Quantity based: a rate for each unit
SignIncrement (+) adds to what you owe the supplier, Decrement (-) takes off (a discount)
CategoryGeneral, Additional, Free, Round Off. Additional is the category the Purchase add-on voucher uses (Add a cost to a purchase with an add-on voucher)
LedgerWhere the amount is booked. A discount ledger is usually an income or a purchase-adjustment ledger
FormulaUsed by adjustments that are not a plain percentage
Product wiseThe adjustment is worked out on each product line, as Adjustment on the line
Stock valuationThe amount is added to (or taken from) the cost of the goods it was charged on, so freight and duty become part of the stock value
VAT adjustment, Luxury tax termMarks the adjustment as VAT or luxury tax so the reports find it
ActiveSwitch off an adjustment you no longer use

Related guides

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