UK Bookkeeping categorisation

Jun 14, 2022
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United Kingdom
Please forgive this novice-level question... I'm a small business owner who has started to use bookkeeping software (FreeAgent) and looking for guidance on categorising expenses. Freeagent has a large list of categories and its most prominent one is this;

CodeDescription Tax reporting type Auto VAT rate
101Cost of Sales Purchases Standard rate
102Commission Paid Commissions Payable Standard rate
103Materials Purchases Standard rate
104Equipment Hire Material Costs Standard rate
150Subcontractor Costs Subcontractor Costs Standard rate

Particularly, I'm looking for guidance on when to categorise an expense as "Cost of Sales" vs "Materials". I have both a restaurant business and a separate landlord (letting) business. Can someone please advise what the following type of expenses would likely come under...?

For the restaurant:
  • raw ingredients
  • takeaway packaging
  • plates and cutlery
  • furniture (such as tables and chairs)
  • kitchen/bar equipment

For the landlord business:
  • factors fees
  • tradesman invoices (eg. painter, electrician)
  • furniture (such as beds and sofas)
  • purchases for diy repairs (such as silicone, screws, wood, lights, extractors)
  • purchases of equipment for the business (such as cameras, power tools, test equipment)


Aug 26, 2022
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United States
raw ing - cogs
takeaway pa - cogs
plats and cutlery - job supplies
furniture - fixed asset - furniture and equipment:Restaurant
kitchen/bar equip - fixed asset - furniture and equipment:Kitchen

factor fees - legal and prof?
tradsman invoices - contractors
furniture - fixed asset - furniture and equipment
diy repairs - google what can be landlord leasehold improvement - because your list is mixed with items
tools and small equipment - job supplies

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