Let's understand how the movement of goods is displayed in Cashflow and P&L reports.

Receipt

When we buy a product from a vendor, there are two possible scenarios. These scenarios differ and are treated separately in reports.

• Prepaid Purchase: You purchase goods by prepayment—first, you pay for the goods, and then you receive them. In this case, an expense will appear in the Money section. Since the product is not yet in the warehouse and there is no receipt document, we cannot link to a receipt. Therefore, this operation should be performed with a Cashflow status. If you wish to track accounts payable to vendors, make sure to check the "Accounts Payable to Vendor" checkbox.

• Postpaid Purchase: You buy goods on credit, paying for them after they have been received and after you have a receipt. This will be displayed in Cashflow. The amount paid for the delivery of goods will be shown under the accounting item "Goods, raw materials, and supplies" in the write-offs.
  • Display in Cashflow: The amount will be recorded as an expense.
  • Display in P&L: It will not be displayed in the Profit & Loss statement as no obligations were fulfilled at that point

To link an Inventory Management document to an Expense transaction, select Inventory Management in the relationship section. If you want to account for accounts payable to vendors, you must check the "Accounts Payable to Vendor" checkbox.

By default, the document will be assigned a Cashflow status. In the Inventory Management tab, you will be able to see if the shipment has been paid for in full.

Please note, if you are making a single payment to cover several deliveries, the Expense document should be split into several lines:

Each Receipt document will display the amount you specified on the corresponding line when you created the Expense.

Sale

When we sell and ship a product to a customer, the following steps and reports are involved:

• Display in Cashflow: If you have created a receipt in the Money section and linked it to a warehouse document, this amount will be reflected in the Cashflow report as a receipt. You can independently select the accounting category.
  

  To link an Inventory Management document to a transaction, select Inventory Management in the bindings section and choose the appropriate document.

• Display in P&L: When you create a Sale document in Inventory Management, all sale amounts will be displayed in the P&L report, provided the sales document is in the "Executed" status. The revenue will be shown in the accounting category you specify, with the amount calculated as Amount = Price × Quantity of Goods.

  On the expense side of the report, the Cost of Goods Sold (COGS) will be calculated as COGS = Average Cost of Purchase × Quantity of Goods. This expense will be displayed under the accounting category "Material Expenses."

All transactions will be recorded in the detailed goods movement document card.

Write-off

We write off products, such as those rejected due to defects.

• Display in Cashflow: The write-off will not be displayed in Cashflow because the payment for these products was made when they were originally received into the warehouse.
• Display in P&L: The average cost price of the written-off goods will be displayed under material costs in the Profit & Loss (P&L) statement.

Arrival and Transfer

Since money is not involved when goods arrive at or are transferred between warehouses, such transactions will not be reflected in the reports.

Accounts Payable to Vendors

The system includes a separate report titled Accounts Payable to Vendors. If you checked "Accounts Payable to Vendors" when creating transactions, they will be included in this report. The Inventory Management document also provides details on the amount received and how much has been paid, but this information is shown separately for each delivery. The Accounts Payable to Vendors report, however, displays the total debt for each customer, summarizing all deliveries.

In expense transactions, when a payment is made to a supplier, the payment amount is recorded in the Debit report. Once the goods are received and the receipt document is completed, the turnover for the received goods is shown under Credit.

For example, if we paid our customer (Vendor Organization) $ 155, this amount will appear in the Debit Turnover and Debit (at the end) columns of the report. After we receive the goods, the same amount will also appear in the Debit Turnover column. However, the Debit (at the end) and Credit (at the end) columns will show 0, indicating that there are no outstanding obligations between us and the customer—no one owes anything.