Specifying my cost of sales

In my business I buy supplies (which are my COS) in bulk. So I want when recording them only the ones which have been used to generate my sales to appear in profit and loss statement. My wish is that I should have a true reflection of my profit. Is there any way I can do this in Manager?

Yes, and you have options.
Either you record your bulk supplies as units or you can use Production Orders tab to convert.

  1. If you buy boxes containing 100 packs then you record your purchases in packs.
  2. if you buy in 100kgs but sell in 1kg, 5kgs as well as 100kgs then you can use Production Orders to convert the 100kgs into other sizes.

Thanks for your response. The challenge I have is that my business is a service provision. It is a dry cleaning business. I use some detergents, which I do also measure how much I have used on daily basis; I do also use hangers as well as plastic bags for packaging. Therefore, I need my accounts to show only that which I have used to generate my revenue. When I use production orders, it is requesting me to insert inventory items which I feel it is inappropriate in this case.

I don’t know how you can help me with this…

Firstly, to match usage to COS you need to use Inventory Items.

So for the detergents you would purchase / record in the units which you would use on daily basis.
If you purchase the detergents in 20L containers, then record as 20L, and if you use in 100ml lots then your usage would be 0.1L or multiple of.

Same for the hangers and plastic bags, purchase / record as per single units.

To transfer the Inventory into COS you would create a quantity only (no money value) Sales Invoice which could be created on a daily or weekly basis - see example below

If you want to track the individual inventory COS you can nominate each a Custom expense account.

To get this on the Summary tab

Also, if daily is to frequent you could do weekly or monthly adjustment via doing a stock count.
If the Inventory Item > Detergent > Qty on Hand say 15L but you only have 6L, then enter 9L into the weekly / monthly Sales Invoice. (or add up your daily count and enter that for the period)

Thank you so much. It’s now working!

@Markgreen, you can also do this with an inventory write-off. Either by counting the day’s transactions of various types (pressed shirts on hangars, for example, to figure hangar and plastic bag usage), or by counting remaining quantities on hand, you can determine how much was consumed. Allocate these costs to a designated account. See https://www.manager.io/guides/10709.

I wonder, however, whether all this is necessary. If these consumables were to be allocated to a designated expense account when purchased, the balance of that account would closely approximate your cost of sales for the current period (differing only by the remaining quantity on hand). The question is how much resolution you want on your cost of sales. Note that for services, this is different than cost of goods sold when selling merchandise. Your rent, electricity, and every other expense is also part of your cost of sales. So do you really need to track detergent and hangars as inventory?

No, they are not part of your cost of sales, they are part of your overhead expenses. Let say you open the business for the week and had “no” customers, you still have to pay these fixed expenses regardless.

Generally, cost of sales expenses can only be the variable costs generated by actual sales.

This is falsely assuming that their “I buy supplies (which are my COS) in bulk” represents only a short term such as a month (revenue matching), however if their bulk purchasing represents a longer term, such as six months, then your statement wouldn’t be accurate until after five months.