A pile of bills, one number
At the end of the month, bills from the timber yard, the board merchant, the fittings supplier and the finishing supplier go into Xero. They are coded as materials. The accounts show you spent a lot on materials this month. They do not show that the walnut sideboard used far more timber than quoted because of a batch of boards with defects, or that the fitted wardrobes needed extra hardware after a design change.
Bills are coded by type, not by job
Accounts packages record what you spent on, not what you spent it for, unless someone tells them. For a furniture maker with several commissions on at once, that someone is usually busy making furniture.
- Supplier bills mix materials for several commissions on one invoice.
- Bills are coded as general materials, not to commissions.
- Tracking categories or projects in the accounts package are set up but not used.
- Timber bought for stock is used across many jobs later.
- Nobody compares material cost with the quote once a job is done.
What invisible material costs mean
You cannot tell which commissions made money, only whether the month did. Quotes keep using the same material allowances even when reality differs. Changes that added material are not always charged, because nobody knows what they cost. And when margins feel tight, you cannot point to where.
Bills allocated to commissions
- Supplier bills are read as they arrive, from email or from your accounts package, with each line extracted.
- Each line is matched to a commission where possible, using order references, hardware lists and cutting lists from the job. Suggestions are shown for you to confirm.
- Lines for stock, such as a timber delivery for the rack, go to stock and are allocated to commissions when timber is used, using your stock records.
- Confirmed allocations are written to Xero or QuickBooks using its tracking categories or projects, so your accounts reflect them too.
- Each commission shows its material cost against the quote, alongside hours if you record them.
- A monthly view shows commissions over or under their material allowance, and why, where known.
| Cost | Recorded today | With allocation |
|---|---|---|
| Timber for a commission | General materials | Allocated to the job |
| Mixed invoice | One code | Split by line |
| Stock timber used later | Not allocated | Allocated on use |
| Extra hardware after a change | Lost in overheads | On the job, chargeable if agreed |
Knowing what each piece cost
Every commission shows what it really cost in materials. Quote allowances are adjusted on evidence. Changes that added material can be charged with a clear figure. Your accountant receives cleaner records. And when a job goes over, you know whether it was timber, hardware or finishing.
It also helps with the timber rack. When bills for stock deliveries are linked to your timber records, the cost of each board is known, so when a board is used on a commission its cost goes with it. That is how the material cost of a walnut sideboard can be worked out even when the walnut arrived months before the client did.
Are your material costs a blur?
- Supplier bills go into accounts as general materials.
- Tracking categories in Xero are set up but unused.
- You do not know the material cost of a finished commission.
- Quote allowances have not changed in years.
- Extra materials from design changes are not charged.