Reading Sales vs Purchases (and Why It Is Not Profit)

Sales vs Purchases (Reports > Financial > Sales vs Purchases) puts two figures side by side: what you sold in a period, and what you bought in the same period. It used to be called Financial Performance and headline a "gross profit" — it no longer does, because the product cannot yet work out a profit. This page explains what the screen tells you, and what it deliberately does not.

What the figures meanCopy Anchor Link

1. Open Reports from the sidebar, choose the Financial card, then Sales vs Purchases. The report opens on the Sales vs Purchases tab with the date range in the toolbar (change it there — the figures reload).
2. The row of five figures reads left to right, in the order the money moves:
   • Gross Sales — everything you invoiced in the period, tax included.
   • Tax Collected — the tax sitting inside Gross Sales. It is your customer's tax, not your income, so it is taken back out of the next figure.
   • Net Sales — Gross Sales with tax and returns taken out. This is the one sales figure on the screen you can quote.
   • Purchases Received — the cost of the goods receipts you confirmed in this period. Draft and cancelled receipts are not counted. The line underneath tells you how many confirmed receipts went into it.
   • Net Sales less Purchases — the difference between the two. It is printed in plain ink, with its size as a percentage of net sales underneath.
3. The Composition band under the figures splits Gross Sales into its three real parts — Net Sales, Tax Collected, and Returns — so the band always adds up to the top line. Purchases are not in the band, on purpose: they are a different set of goods.
4. What This Figure Is at the bottom of the screen states the same qualification in full, and it is worth reading before you quote any number from this report.

Why "Net Sales less Purchases" is not your profitCopy Anchor Link

Profit needs the cost of the goods you actually sold. This product does not record that yet — a sale records its value, its tax and the stock quantity that left, but never the cost of that stock. So the screen compares two different things:

• Sales are the goods that left in this period.
• Purchases are the goods that arrived in this period.

Stock you bought in March is usually sold in April, so in any single period the two sides do not line up. A month with a big delivery will look terrible and a month with none will look wonderful, and neither reading is real. The figure is a useful cash-shaped sanity check — "did I buy far more than I sold?" — and nothing more.

Also not included anywhere on this screen: overheads, wages, rent, vehicle and route expenses, and opening or closing stock. Day-cycle expenses are a separate report (Reports > Financial > Cash Operations).

If Purchases Received shows zeroCopy Anchor Link

If the screen says purchases are zero but names a number of confirmed receipts, the receipts exist but carry no unit cost. Record costs on your goods receipts (Procurement > Goods Receipts) and the comparison starts to mean something. Until then, treat the difference as unmeasured rather than as good news.

Revenue by ChannelCopy Anchor Link

The second tab on this screen, Revenue by Channel, splits the period's revenue across the channels that took it (Point of Sale, Line Distribution, and so on), with a share bar per channel and a table you can sort and page through. Switching tabs keeps your date range.

Next: Changing the Date Range.