Bill vs cash purchase vs purchase order: which document to use

What these documents are

Usystems offers three main documents for recording purchases from vendors:

1. Bill — you receive an invoice from the vendor and pay them later (on credit)
2. Cash Purchase — you buy items and pay immediately at the time of purchase
3. Purchase Order (PO) — you request items from a vendor before delivery (a pre-purchase commitment)

Each serves a different buying scenario and creates different records in your accounting system.

Why the distinction matters

The document type you choose affects:

• When the expense is recorded — on purchase date, on payment date, or when you place the order
• How your cash and accounts payable are tracked — credit purchases create debt to vendors; cash purchases spend cash immediately
• Inventory timing — whether items are counted when ordered, received, or paid for
• Approval workflows — POs may require authorization before committing budget

Choosing the right document ensures your financial records match how you actually do business and keeps your accounting accurate.

How each works in Usystems

Bill

A bill (also called a vendor invoice) is created when you receive a formal invoice from your vendor. You record what you owe, and Usystems tracks the debt until payment.

• When to use: You have received goods or a service from a vendor and they have invoiced you
• Payment timing: You pay later, on terms agreed with the vendor (Net 30, Net 60, etc.)
• Accounting effect: Creates a liability (money you owe) on the day you record the bill, regardless of when you pay
• Workflow: Receive goods → Receive vendor invoice → Record bill in Usystems → Pay bill when due

Navigate to Purchases → Bills → New Bill
Open in Usystems

Cash Purchase

A cash purchase is for immediate, out-of-pocket buying. You pay the vendor at the moment of purchase (or very soon after).

• When to use: You pay cash or the equivalent (credit card, bank transfer) immediately for goods or services
• Payment timing: Paid on the spot or within a few days
• Accounting effect: Records an expense and reduces cash on the same day; no accounts payable is created
• Workflow: Identify what you need → Pay vendor immediately → Record cash purchase in Usystems

Navigate to Purchases → Cash Purchases → New Cash Purchase
Open in Usystems

Purchase Order (PO)

A purchase order is a formal request to a vendor for goods or services. It is created before goods arrive and before you invoice the vendor.

• When to use: You want to request items from a vendor and document the order terms (quantity, price, delivery date) before anything is delivered or invoiced
• Payment timing: Typically unpaid until a bill is received from the vendor
• Accounting effect: A PO creates no immediate expense or liability. It is a commitment to buy, not a purchase yet. Only when you receive goods or a bill does the actual expense appear in your accounts
• Workflow: Create PO with vendor and requested items → Vendor delivers goods → Receive vendor invoice (bill) → Record bill in Usystems → Pay bill when due

Navigate to Purchases → Purchase Orders
Open in Usystems

Comparing the three

Where you see these in Usystems

• Bills: Go to Purchases → Bills to view, create, and manage all bills.
  Open in Usystems

• Cash Purchases: Go to Purchases → Cash Purchases to view, create, and manage all cash purchases.
  Open in Usystems

• Purchase Orders: Go to Purchases → Purchase Orders to view, create, and manage all purchase orders.
  Open in Usystems

All three appear in Reports (such as aging reports for bills and cash purchases, and outstanding PO reports).