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Profit and Loss account


#1

Hello I have a question…
Looking at my P&L I notice that the only item in Cost of Sales is materials. I have a service business and use contractors so should my contractor payments be attributed to cost of sales along with materials to arrive at gross profit?
My contractor payments (or labour) is placed in the ‘less expenses’ section


#2

Cost of Sales only contains items with nominal codes in the 5000-5999 range which is basically purchases and carriage.

If it was anything else I would say just slap in a custom nominal in the right range but this is one area where I would suggest asking a qualified accountant. A lot will depend on the exact nature of the contracts. I know that HMRC can get quite sniffy about this area.


#3

Ah yes thank you for the advice much appreciated. I would like it in the right spot but it’s obvious now why it’s not there automatically.
Kind regards