FAQ: Cash Purchase Basics

Q: What's the difference between a cash purchase and a bill?

A: A cash purchase is paid immediately when created. A bill is an unpaid invoice from the vendor that you settle later. Use a cash purchase when you pay right away; use a bill when the vendor sends you a payment request for later.

Q: Can I edit a cash purchase after I finalize it?

A: Once a cash purchase is finalized, you cannot edit most fields (vendor, lines, amounts). If you made a mistake, you must create a return (a negative cash purchase) to reverse it, then create a new purchase if needed.

Q: What happens to the vendor's balance when I create a cash purchase?

A: The vendor balance does not change. Because you paid immediately, there is no outstanding debt. The vendor's account stays at zero. (This is different from a bill, where the vendor's balance increases until you pay them.)

Q: Can I create a cash purchase without entering a vendor?

A: No. The vendor field is required. If you are buying from a new vendor, you can create the vendor on-the-fly while filling out the cash purchase form, or create them in advance in your contacts.

Q: How does the system determine the cost of each item on the purchase?

A: The system suggests the last-known cost from your history. However, you can override it. If this is a new vendor or a new item, you set the cost yourself. The cost you enter will be used for inventory valuation and expense recognition.

Q: What if I need to return items from a cash purchase?

A: Create a cash purchase return (or "refund"). This is a negative cash purchase that reverses the original. You choose the items you are returning and the refund amount. The system updates your inventory and your cash balance.

Q: Can I apply discounts on a cash purchase?

A: Yes. You can apply discounts at two levels:

• Line discounts: A discount on one or more individual line items.
• Document discounts: A discount on the entire purchase.

Discounts reduce the taxable amount, so taxes are recalculated.

Q: What currency should I use if the vendor is in a foreign country?

A: The cash purchase inherits the vendor's default currency. If the vendor is in a foreign country, choose their currency (e.g., USD, PKR). The system will apply the current exchange rate at the time of purchase, and record the payment in your home currency.

Q: Do I have to pay immediately after creating a cash purchase?

A: It depends on your configuration. In most cases, finalizing a cash purchase also records the payment automatically. However, some setups allow payment to be recorded separately. If you see the status as "Finalized / Unpaid", the expense has been recorded, but the payment has not yet been made.