Materials on charged to customer - no mark up

[Tracey9]

Hi,

When carrying out a job we purchase materials from a supplier. Later we invoice the customer for the materials. We do not add any markup or percentage on this.

When creating the bill should this be accounted for as cost of goods sold?

Cheers

[Tracey_H]

Hi @Tracey9 

Thanks for your post. If you're not sure about what account to allocate transactions to we do recommend you check with your accountant to get advice specific for your business.

Having said that, cost of sales is used normally for material and/or labour costs directly associated to a sale. Expenses are the running costs of the business, for example, phone, insurance, accounting fees.

Please let me know if you need further help.

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