Basic Record Keeping

Wired2MakeMoney

(I know there is more to basic record keeping than what i have put below. Just need an understanding on somethings im not to sure about)

Hi can some one explain to me to what it means by keeping a record of all your sales?

Like for example (to understand me more)...

If i sell an apple for 24p would you record that as 24p sale or would you only record the profit you have just made from the 24p?


Also expenses.....

If i bought 20 laptops but to ship them it would cost around 100 GBP would the delivery charge be classed as an expense or would it be classed as part of the purchase price?

Thank You

timnicebutdim_2

Hi there, lets say in a period (a month year whatever) you sold one apple. A profit and loss statement would look like this:

Sales 24p
Less Cost of Sales (5p)
=Gross profit 19p

Less Overheads Xp
=Net Profit XXp

Cost of sales means the production costs associated with getting a product to a sellable condition. E.g. purchases of materials/products + delivery, manufacturing etc. In this case we purchased the apple for 5p.

Overheads include: Wages, Rent, Rates, Selling, Marketing, Finance & all other non-production expenses

Net profit is basically total sales revenue less total expenditure.

So in a nutshell you keep a record of all your sales, all your expenditure and hopefully the difference equals a profit.

Wired2MakeMoney

thank you

sorry double post