Make cash purchases (purchase without purchase invoices)

A cash purchase occurs when a business pays for goods or services immediately upon ordering or delivery. No credit is extended by the supplier. No account payable is created. The resulting expense is posted immediately to an expense account, regardless of whether the business uses accrual or cash basis accounting. Therefore, no purchase invoice is required. The entire transaction occurs in a single step.

A cash purchase does not need to be paid in physical cash. It can be paid via any form of exchange. Its distinguishing feature is that credit is not extended by the supplier.

Before a cash purchase can be entered into Manager, at least one cash account or bank account must be created. Then, within the Bank Transactions or Cash Transactions tab, click New Bank Transaction or New Cash Transaction and select Spend money:

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Complete the cash payment form. By default, today’s Date and cleared transaction Status are selected. These entries may be edited. Choose a Bank account or Cash account (depending on the transaction type). Enter the supplier’s name in the Payee field. Line items can be entered either semi-automatically, by selecting inventory or non-inventory items, or manually. Applicable tax codes can be selected:

Click Create to complete the transaction. Any necessary adjustments will be posted to inventory accounts. If the payment is from a cash account, a Reference number will automatically be applied. Manager will find the highest existing number and add 1.

Unit prices on cash payments are assumed to be inclusive of taxes calculated in accordance with the selected tax code. The calculated tax will be deducted from the Amount rather than added to it. That tax will reduce the Tax payable account. Therefore, if tax paid cannot be offset against tax owed under local law, do not select any tax code. Instead, include the tax collected by the supplier in the Unit price and select no tax code.

To view the payment, go to either the Bank Transactions or Cash Transactions tab, depending on which type of account was used to pay for the purchase. Locate the transaction and click View :

The payment form can be filed as documentation of payment:

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When a cash purchase is entered, any available credits you may have with the supplier from debit notes or returns will not be applied. This is because such credits are recorded in suppliers’ subaccounts in Accounts payable, which is not invoked for cash purchases. To use such credits, a purchase invoice must be entered instead.

When a supplier statement is created, cash purchases from that supplier will not be included. If a complete record of purchases from a specific supplier is desired, purchase invoices must be used.



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