How do I deal with craft supply expenses?

lauragyre

My business sells crafts we make. What is the easiest way to track the expense of buying consumable supplies, such as wood and glue?

Ozdownunder

Set up Material Purchases in accounts.
Go to Accounting
Chart of accounting
Then look under Expenses
Then add "Purchases – Parts & Materials" It might even be there already.

Then when you purchase I use Wave Receipts App
As I purchase I pay for it straight away and while in the shop I take a photo of receipt and upload it to Wave.
I would do it straight away if the app allowed a quicker access and fill in all details about the transaction on my mobile, at first I use to do this but it is time consuming so now I just upload details, later I get on the laptop and verify the receipt and post to accounting, make sure the photo is good quality or you may have to retake the photo.
How this helps
What I have found if you keep buying purchased and bills and paying later I spend days correcting and even paying th ebills.
But it was hard at first I pay all my bills as I get them and then do above, it only takes 1 - 2 mins each time, a lot better than spending two days trying to figure it all out later, just my two boobs worth Hope it helps

lauragyre

Thanks! I don't fully understand the accounting concepts behind this, but I'm just learning that material expenses are only deductible for products that sold during the year (like, materials used to make products that haven't sold yet aren't deductible yet) so I'm hoping that at least part of that accounting process is something that wave can deal with automatically. For example, if I enter my inventory value at the beginning and end of the year and also keep track of material expenses for the year, maybe all that can be averaged out somehow?

Alexia

Hi, @lauragyre,

Wave doesn't have a dedicated feature for inventory management at this time, but we do have a workflow that we've shared in the Help Center that might help you keep track of the value of what you buy and the costs of the goods you sell. You can find it here[link].

The short version is that you'll record your stock in an asset account, and when you sell products, you'll record an expense to that asset account equal to the amount you paid for the stock you used (this is called "Cost of goods sold", or CoGS). It's a bit of work, but it'll help you keep track of the value of your current inventory and of the products you've sold off.