'Cash purchases' means any payment you make to suppliers with whom you do not have an account. As you don't have an account, you will have to pay for the goods at the time when you buy them.
Examples of the types of supplier from whom you might make Cash purchases include:
- suppliers from whom you make one-off or infrequent purchases
- outdoor activity centres that sell off equipment - such as wetsuits, helmets and so on - after a certain amount of time. You may decide that there is a market for reselling second hand items of this nature
- members of the public. You may offer a part exchange facility where you take in customers' old equipment against the cost of a new purchase
Cash purchases only include items that you buy for resale. They don't include things like tea and coffee bought for use at work, or items such as business stationery. Don't include things like this here. They're covered elsewhere in the cash flow.
Remember to keep safely all the invoices and receipts for Cash purchases, even if the amounts are small.