Hi. I buy a few reams of paper a month to print off invoices and dispatch notes that get packed and shipped with customers products.
I’m thinking this probably is a direct expense or cost of sale as opposed to 7504 for stationary.
Could anyone advise, thanks in advance.
Cost of sales is any item used in the process of making goods or supplying services.
Despatch notes or paper is not a cost of sale. It’s an administrative expense.
OK thanks. I guess in this case it doesn’t really matter I just don’t want to get in to bad habits.
In fairness it wouldn’t have made a difference to your overall tax situation regardless of where it was posted.
It’s when you mix up capital assets with expenditure then it can start getting messy.
It’s not a cost of sale, but you could argue it’s a direct cost. General stationery is an overhead - which are expenses related to the running of your business rather than directly related to the products you sell.
As @Paul_Courtier pointed out though, it makes no difference to your overall tax position, but may be helpful to you in understanding how much you spend getting your goods to your customers.