Categories that match a shop
Freight and transport, loading and unloading, rent, staff salary, electricity, phone, repairs, packing material, travel and general counter spending. Recording an expense against a category takes seconds, and after two months you have a monthly breakdown that did not exist before. The first look at that report is usually the most useful five minutes a shop owner spends in a year.
Freight is the one to watch
In material supply transport is close to cost of goods rather than overhead, and it moves — diesel changes, a hired truck rate changes, a longer site run costs more than the rate you quoted. Freight is recorded on the purchase side into landed cost and on the delivery side as what you charged, so you can see whether you are actually recovering what delivery costs you. Plenty of shops find they are subsidising their most demanding customer.
The costs shops forget
Three never appear in any register. Interest on borrowed working capital, which in a sixty-day credit cycle is a monthly number rather than an annual one. The real cost of a vehicle — not just diesel but the driver, insurance, servicing and the fact that it is wearing out. And breakage, spillage and short delivery, which in cement and tiles is a predictable percentage. Recording all three turns a rough sense of profit into a figure you can act on.
What it does to the monthly picture
Rent, salaries and electricity are known figures nobody adds up until year end. Including them means your monthly profit view is not simply sales minus purchases, which is the calculation most shops run in their heads and which is always too optimistic. Knowing the real monthly cost of running the shop is what tells you whether a thin-margin bulk line is worth the effort.
Reviewing the categories quarterly
The value of expense tracking is not the entry, it is the look back. Once a quarter, put three months of category totals side by side. What you are looking for is a line that has grown without a reason you can name — freight rising faster than deliveries, repairs becoming routine on a vehicle that should be replaced, a supplier charge that crept up without a conversation. None of these are visible month to month and all of them are obvious across a quarter. Fifteen minutes, four times a year.