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Running a Distribution Business in Tanzania: From Purchase Order to Invoice

· 5 min read
eSecured ERP Team
eSecured ERP Team
eSecured Cloud Hosting & IT Services

A cement or building-materials distributor in Dar es Salaam might order three truckloads from the factory on Monday, receive two of them on Wednesday, and have six customers waiting on orders by Friday. If those orders, deliveries and stock counts live in a notebook, a WhatsApp group and a spreadsheet, nobody can say with confidence what's in the yard, what's still on its way, or which customer orders haven't been invoiced. This guide shows how to run the whole cycle in one place.

Why the spreadsheet stops working​

A spreadsheet is fine while you buy one product from one supplier. It breaks down as soon as any of these happen:

  • Part-deliveries. You ordered 1,000 bags and 600 arrived. Is the order closed? What's still owed to you?
  • More than one store or yard. Stock in Kariakoo and stock in Mbezi are different stock, and they're worth different amounts.
  • Customer orders waiting on stock. You need to see open orders next to what's actually available.
  • Money tied up in stock. At month-end, your accountant asks what the inventory is worth, and nobody knows.

The Trading module in eSecured ERP handles all four, using the same stores and stock as your Point of Sale. A bag received into the yard is the same bag a cashier sells at the counter.

The trading cycle: purchase order, receive goods, inventory, sales order, invoice

Step 1: Raise a Purchase Order​

Open Purchase Orders and click + New Order. Pick the vendor (or add one on the spot), choose TZS or USD, and set the order date and expected delivery. Add each product with its quantity and unit cost. The unit cost starts at the item's cost price, so you only change it when the supplier's price has moved.

Save it and the order is numbered for you: PO-0001, PO-0002 and so on. Until you send it, a draft can still be edited. When it goes to the supplier, click 📤 Mark as Sent.

Step 2: Receive the goods as they arrive​

When a truck arrives, open the order and click 📦 Receive Goods. Choose the store or yard it went into, and check the quantities. Each line shows what was ordered, what's already been received and what's still outstanding. If only 600 of 1,000 bags came, receive 600. The order moves to Partially Received, and you receive the rest when the next truck arrives.

The moment you confirm, stock in that store goes up at the order's unit cost. Nobody has to retype the delivery anywhere else.

Step 3: Know what's in stock and what it's worth​

Inventory lists every product with its quantity, unit cost and stock value, across all your stores or one at a time. Each line is marked In Stock, Low Stock (at or below the item's reorder level) or Out of Stock. Click the Low Stock tile to see exactly what needs reordering, and export the list to Excel for your accountant.

Step 4: Take the customer's order​

Open Sales Orders and click + New Order. Pick the customer, add their own reference (their PO number, for example) and the products. Prices start at each item's selling price. When the customer agrees, click ✓ Confirm Order.

Step 5: Turn the order into an invoice​

Click 🧾 Convert to Invoice. A draft invoice opens with the customer, the order's lines, your company and bank details, and a line naming the sales order. VAT is worked out on the invoice, with a TRA tax category on each line. Once you move it out of Draft, it posts to your books automatically if you use the Accounting module, and it can issue a TRA fiscal receipt if VFD is switched on for your company.

The one mistake to avoid: counting a delivery twice​

There are two ways goods can enter stock: receiving a Purchase Order, and approving a supplier's bill (Purchase Invoice) whose lines are picked from your item catalog. Both add stock. If you receive the delivery on the Purchase Order and approve the supplier's bill with the same catalog items, the goods are counted twice.

So decide one way per delivery. If you receive through Purchase Orders, enter the supplier's bill without picking those items from the catalog, and choose an expense category your accountant has mapped to the right account in Posting Setup.

See the whole business at a glance​

The Trading Dashboard shows open purchase orders and the value still to arrive, open sales orders and the value still to invoice, total inventory value by category, and purchases against sales over the last six months. Trading Reports list orders for any date range and give a full inventory valuation you can export.

Getting Trading​

Your service provider switches Trading on for your company. Sales Orders is a separate option and can be used with or without the rest of Trading. Delivering sales orders on your own trucks or by drop-shipping is covered in our guide to sales orders and drop-shipping.