Any item which you purchase with the ultimate plan to sell on is classed as Stock. These can include:
- Recipe Books
- Motivational Items (e.g. Member Dairies)
- Promotional Items (e.g. T-shirts, notepads)
Note: Magazines and Biscuit bars (HiFi) are not classed as stock as you do not ‘physically’ purchase these. Instead, they’re provided on a ‘sale or return’ basis. The amount you receive for each sale is classed as ‘commission’ and comes under your income.
If you do not return Magazines and are invoiced for these at a later point at full price, this can be an expense.
Recipe Books / Motivational Items
It is likely that you’ll be purchasing Recipe Books from Slimming World. These are then sold at a slightly different price, and the difference is not ‘commission’ but ‘profit’.
This is because you purchased the item at a lower cost, and then sold at the higher amount. The difference is your profit, and is taxable.
The purchase price of the items should be entered as an expense within your accounts.
When the item has been sold, it should be listed on the income section of your accounts.
Emma buys a book from the eShop for 4.50 and then sells it to a member for 4.95.
The 4.50 is logged as an expense and the selling price of 4.95 should be listed as an income item. Your spreadsheet will make the relevant calculation to show the profit (45p).
It is recommended to keep up to date stock sheets to track purchases of books and selling amounts to keep your records up to date. Check the ‘Record Keeping’ section of this guide for more information.
There’s no need to list every individual item purchased as part of an overall order – providing the full order amount was for business use.
For example, if you purchased 10 books for 4.50 in one order, you can just list the purchase date, description (eshop order reference) and the full amount charged – 45.00.
Ensure you keep a copy of the full order details, should you need to evidence what was purchased at a later date.
eShop purchases
Not all eShop purchases may be classed as stock (e.g. visuals are a business expense), but keep copies of emailed receipts to allow you to categorise the stock purchases from the expenses.