How to account for materials used

[freeflowinfo]

Hi as an handyman if you buy paint, wallpaper or say copper piping to do a job and you buy it specifically for that one job and not to keep it as a stock, you then get paid for the labour and for the cost of that material, where do you put the material expense so it does not go against your taxable allowance as you made no profit on the material, because customer effectively paid for it. Does it go under cogs? Expenses?

 

[DWS]

Cost of Goods —— Purchases

 

[Karimbo]

Are you using any accounting software or just using spreadsheets?

 

[freeflowinfo]

Just spreadsheet

Are you using any accounting software or just using spreadsheets?

 

[DWS]

Whichever method you use to record the transactions the materials are still
Cost of Sales - Purchases

 

[MyAccountantOnline]

Hi as an handyman if you buy paint, wallpaper or say copper piping to do a job and you buy it specifically for that one job and not to keep it as a stock, you then get paid for the labour and for the cost of that material, where do you put the material expense so it does not go against your taxable allowance as you made no profit on the material, because customer effectively paid for it. Does it go under cogs? Expenses?

When you buy any materials to use for any jobs (even if they wont be used immediately and are kept in stock) they are all COGS ie Cost of Goods Sold. Some software will categorise it as COGS some will be purchases.

 

[Karimbo]

Whichever method you use to record the transactions the materials are still
Cost of Sales - Purchases

i get that, but i think people who dont understand the basics of bookkeeping should not be using excel. A cloud accounting software will stop them making mistakes.

They can be pricy on a total annual basis, but many banks provide free access to partner cloud accounting software.

excel is fine for a hobby business, or those who understand bookkeeping well. But it's not suitable for the average busines owner. A basic formula or formatting error can mess up the computations.

 

[DontAsk]

No need for anything in the cloud. VT+ is a good price and you keep YOUR data on YOUR machine.

 

[DWS]

No need for anything in the cloud. VT+ is a good price and you keep YOUR data on YOUR machine.

Totally agree, I use VT+ for 90% of my clients, in fact I charge more for clients using there own software as it usually means more work correcting things, nothing wrong with excel spreadsheets either in my opinion, still a great piece of kit.