Chart of Account for Material Purchase

[mdfaisal]

I am reaching out regarding the chart of accounts for purchasing materials in my metal fabrication business. We regularly purchase materials such as SQ Tube, REC Tube, metal sheets, flat bar, angles, pipes, round bars, etc., which are used in manufacturing customer customizable orders.

To efficiently track these transactions, I would appreciate your guidance on the appropriate chart of accounts to use for purchasing these materials. Specifically, I am looking for accounts that will help us accurately record and monitor our inventory levels, as well as track the cost of goods sold for these materials. The software is MYOB.

[Isaiah_C]

Hi @mdfaisal,

Thank you for the post, and welcome to the Community Forum! We recommend reaching out to your accountant to make sure which account, and to track these transactions effectively.

If my response has answered your enquiry, please click "Accept as Solution" to assist other users in finding this information.

If you have any additional concerns, please feel free to post again.

Kind regards,

Sai

[DuncanS]

@mdfaisal @Isaiah_C 

I would suggest using Cost of Sales.

The Cost of Sales Accounts could reflect your Income Accounts.

You could have a Cost of Sales called Materials - Manufacturing Orders.

There could be a ATO Benchmark to compare your Gross Profit Margin to your Industry Average.

You would need to engage a MYOB Partner to setup Inventory.

Duncan