Buying and receiving raw materials

Raw materials are the components and ingredients you buy to use in manufacturing. In Usystems, buying and receiving raw materials follows the same purchase workflow as any other inventory item, but you track them separately to distinguish them from finished products and resale goods.

Before you start

• Your raw materials must be set up as Products with the type "Raw Material" or "Component" (ask your admin if unsure).
• You need a supplier (vendor) in your Contacts list.
• You should know the quantity and unit price you are ordering (e.g., 100 kg at 50 per kg).
• You may have a Purchase Order approval process—check with your manager.

Steps — Creating a Purchase Order for raw materials

1. Go to Purchase Orders. Open in Usystems

2. Click New Purchase Order or + Purchase Order.

3. Choose the Supplier (vendor) from the dropdown.

4. Enter the Order Date (usually today).

5. In the Items section, click Add Line or + Item.

6. Choose the raw material from the product dropdown.

7. Enter the quantity you are ordering (e.g., 50 kg).

8. The unit price and total should auto-fill from the supplier's contract or your product setup. If not, enter them manually.

9. Repeat steps 5–8 to add more raw materials.

10. Click Save to create the purchase order.

11. Depending on your company's workflow, the order may be sent to the supplier automatically, or you may need to click Send or Confirm.

Steps — Receiving raw materials

When the materials arrive:

1. Go to Bills (the receiving document). Open in Usystems

2. Click New Bill or + Bill, or click Receive on the purchase order if your system links them.

3. Choose the supplier.

4. Enter the Order Date or reference the Purchase Order number.

5. In the Items section, add the raw materials received.

   • Choose each raw material from the dropdown.
   • Enter the quantity received (it may auto-fill from the PO).
   • Enter the unit price (if different from the PO, you will need approval or a price update).

6. Click Save and then Receive (or similar) to move the materials into inventory.

7. Usystems adds the raw materials to your Warehouse or Inventory account and records the cost.

Accounting impact

When you receive raw materials:

• Your Inventory (Warehouse) account is debited (increased) by the cost of materials.
• Your Accounts Payable (vendor liability) account is credited (increased).

When you use those materials in production, the system transfers the cost from Inventory to Cost of Goods Sold.

Tips & common mistakes

• Track by lot/batch. If your raw materials have expiry dates or batch numbers (e.g., pharmaceutical ingredients), note them when receiving. This helps with recalls and first-in-first-out (FIFO) inventory management.
• Check quality on receipt. Inspect the materials for damage or defects before confirming the bill. If there is damage, create a return or claim with the supplier.
• Keep suppliers updated. If you frequently change quantities or lead times, update your supplier contact or purchase order templates.
• Do not skip the receive step. Receiving the bill finalizes the inventory record. If you only create a purchase order and forget to receive, your inventory count will be wrong.
• Match invoice to receipt. When the supplier's invoice arrives, match it to the receipt you created (called a three-way match in accounting). This prevents overpayment and catches supplier errors.