Anything you buy throughout the year should be classified as purchases. At year-end (or more often if you wish) you so a stocktake and value the stock in hand at the lower of cost and net realisable value. That includes materials, work in progress and finished goods. You can recognise each category separately, or you can just include it all as total stock.
You then raise a journal to debit stock in the balance sheet and credit closing stock in the P&L with the stocktake value. The following year, you do the same but in addition to the above journal, you would also do another to move the opening stock (i.e. previous year’s stocktake value), so this time debit opening stock in the P&L and credit stock in the balance sheet.
Thus the P&L reflects the cost of the goods you have sold in the year, i.e. movement in stock, rather than the cost of your purchases.