Purchase Account

How do I handle general purchases other than cash purchases?

I have several vendors as suppliers providing me materials or service. They raise bills on me which I pay immediately by bank or later also through cheque/bank transfer.

It depends on what you buy, which modules you want to use and if you need to register invoices and payments or directly the payments.

If you need to account invoices, you need to activate the Suppliers and the Purchase Invoices modules.

For materials you can use the Inventory Items module.

In the end I suggest you to read the guides and do some testing with a test Business to see what fits your needs best.

Manager accommodates two types of purchases: credit and cash. There is no distinction between “general” purchases and any other type. Anything can be purchased by either a credit or cash purchase.

Credit purchases are those entered via purchase invoices (see Create purchase invoices | Manager). Credit purchases are made from suppliers, who must be created in advance. Actual payment (with a payment transaction) for credit purchases can be from a bank account or cash account and can occur immediately or at a later time. The important factor is that credit purchases pass through the Accounts payable account.

Cash purchases do not involve purchase invoices. Nor do they involve a designated supplier, but rather a payee. They do not pass through Accounts payable. The terminology may be confusing to some people, because it implies the payment must be made from a cash account. But they can also be paid from either a bank account or cash account. See Make cash purchases (purchase without purchase invoices) | Manager.

Thanks Tut for your response.
Please guide me when I am recording a purchase invoice not for an inventory item which ‘account’ do I input? I am not specifying any ‘item’ as its a service.
At present I have created a ‘Purchase’ account in ‘Expenses’ group and recording the purchase invoice in ‘Purchase’ account like I am recording a sales invoice in ‘Sales’ account.

Thanks in advance.

Thanks Davide.

I have activated the Suppliers as well as Purchase Invoices modules but while recording a Purchase Invoice which is the account I should mention as I am not specifying any item as I do not want to maintain Inventory stock as I do not sell in units or hold stocks.

Whichever account is appropriate. Or create new ones to match your needs. For example, Legal fees for amounts paid to lawyers, Repairs and maintenance for services from a plumber or painter, etc.

I am facing the same dilemma!!
What solution did you come up with?

The advice given above is correct… if a purchase invoice is generated for product purchased and then to be sold (not put into stock / inventory) … say something ordered for a customer who will collect in the next day or two … then select account “Purchases - Cost of Sales” and process your purchase invoice. In your CoA create a group less: Cost of Sales then add “Purchases - Cost of Sales” to that group.
Your reporting will also show you how much you had to spend to make the sale.

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Is there a way to make a negative sub account, for example:

Less: Cost of Goods Sold: (Group Account)
Beginning Balance (sub-account)
+ Purchases (sub-account)
- Ending Balance (sub-account)

What you describe would not be subaccounts.

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To show this breakdown, you need to either manually override Manager’s costing of inventory or disable the inventory tab altogether, but sure you can. Just name it as “- Ending Balance” and only post credit entries to it.

Thank you All for the help.

Surely a custom / transformed report is a better way of getting this data presentation. Similar to the existing

  • Customer Summary
  • Supplier Summary
  • Fixed Asset Summary