I buy things like screws, nuts, bolts, drill bits etc. to carry out my work. I cannot cost for these so they are a 100 per cent cost to me. What category do they come under in purchases.
‘There is no such thing as a stupid question if you don’t know the answer’
If they’re essentially the “ingredients” that get used up as part of making the things (or services) you sell them I’d say general purchases is as good a place as any.
Thank you for your prompt reply. The problem is that I don’t sell these items on. They are provided to the customer free of charge. If I’m given a price for a job, say £1000, I am supplied all the major equipment. However things like screws, rawl plugs etc are supplied by me and are not charged back.
When I ised to make cakes for sale I would book the ingredients as “general purchases”. For a trade like building or plumbing I’d think of the gross profit as being the amount you charge for the work less the cost of materials, which suggests things like you describe should be purchases rather than overheads - even if you can’t attribute each individual nail to a specific job, over the course of a year all the nails you bought will end up part of one job or another (and if you really want to be accurate you can count how many you have left at year end and adjust for “closing stock”).
I’m not sure why you think these are FoC. I use screws and plugs etc and they are priced for on each job, maybe not an exact amount but they are priced for.
As for categories, I put them down as general purchases, in fact almost everything I buy is categorised as general purchases.
Within broad limits the level of granularity that you use is down to what YOU need know about your business. If you NEED to identify what you spend on consumables as opposed to items charged directly to clients then you can always set up a custom category.