There a number of places to make an observation, however the most obvious is from the Observations widget itself.
Scroll down to the Observations widget on the transaction page and press the button that says ‘Click here to add a new observation’. It will then ask you to include a subject and click on the document/search type on the drop down menu. There is also a ‘Note’ section, this is just to add a message relating to the observation.
An observation can also be made from the document pop-up. Do do this, first select the document type you would like to create an observation about. Then on the toolbar on the bottom of the pop-up, select ‘make an observation’. The screen with then continue as though you have created an observation from the observation widget.