Date created: Oct 12, 2022  •   Last updated: Oct 12, 2022

What is Purchases

Purchases is the total amount of money spent on making purchases from suppliers for the purpose of reselling for a profit.

Purchases Formula

ƒ Sum(Purchases)

How to calculate Purchases

Say you own a small business selling desserts, and you want to purchase a new type of ice cream scoop tool costing $500, paper towels branded with your logo with a $700 value, and several sets of new plates costing $1,000. Your sum of purchases in this scenario would be $2,200.

Start tracking your Purchases data

Use Klipfolio PowerMetrics, our free analytics tool, to monitor your data. Choose one of the following available services to start tracking your Purchases instantly.

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How to visualize Purchases?

It's pretty straightforward to track your Purchases data. Your aim is to display the number, expressed as a dollar (or other currency) amount, perhaps segmented by expense type. A summary chart is a basic yet useful view for metrics like Purchases. Take a look at the example to get an idea of how to visualize your Purchases data:

Purchases visualization example



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vs previous period

Summary Chart

Here's an example of how to visualize your current Purchases data in comparison to a previous time period or date range.
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Measuring Purchases

More about Purchases

Purchases refers to the total cost of buying from vendors and external suppliers. It differs from Cost of Goods Sold (COGS) or Cost of Sales by the fact that purchases are recorded at the time of purchasing inventory, whereas COGS is calculated at the time of selling inventory and factors in labor costs amongst other costs. Purchases purely calculate how much you paid to suppliers and vendors.

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