Cleaning and pool chemicals: stock or expense?
Whether a gym should keep cleaning supplies and pool chemicals as stock or expense them when bought, and how to keep control of them either way.
By Achekam · · 4 min read · For Fitness businesses in South Africa, Nigeria, Kenya
A gym with a pool goes through chlorine, pH balancer and test strips every week. Add the cleaning chemicals for the change rooms, paper towels, hand soap, wipes for the machines and the bin bags, and the club spends real money on things that are used up rather than sold. The question comes up the first time someone sets up the books: should all of that be stock, like the protein bars in the café fridge, or simply an expense when it is bought?
For most clubs the answer is to expense consumables and keep control of them in a different way. This article explains why, how to record them in Achekam, and when your accountant may want to treat a large stockpile differently.
Items you sell versus items you use up
The difference is what happens to the item after you buy it.
| Items you sell | Items you use up | |
|---|---|---|
| Examples | Supplements, drinks, towels for sale, branded clothing | Pool chemicals, cleaning products, paper towels, machine wipes |
| How they leave | Through a till sale | Poured, sprayed or thrown away |
| What the books need | Stock on hand and cost of sales per sale | The cost, in the period it is used |
Stock accounting earns its keep when items leave through a sale, because each sale can record the cost of what was sold. Consumables never go through a till, so treating them as stock creates work without giving you that benefit.
Expensing consumables through supplier bills
Record each consumables purchase as a supplier bill, line by line with its VAT, and code the lines to expense accounts. Your books open with a standard chart of accounts, and you can add accounts, rename them or switch them off, so set up accounts that match how you want to see the spending:
- Pool chemicals
- Cleaning materials
- Hygiene and washroom supplies
A bill entered without a purchase order waits for approval before it posts, and bills can be paid in full or in parts from the bank account you choose. With separate accounts, the monthly management accounts show what the pool really costs to run, which is useful when you are pricing aqua classes or deciding whether a heat pump would pay for itself.
Why the Item Master suits items sold at the till
The Item Master in the Accounting menu creates products with a SKU, a name, a category, a selling and cost price, an opening quantity and a VAT treatment. It is designed for items that are sold. A till sale takes the sold quantity off stock in the same step and posts cost of sales against inventory at the product's cost price.
Pool chemicals entered there would sit on the product list with a selling price nobody uses. They would never leave stock through a sale, and stock counts, wastage and opening quantities do not post to the general ledger, so their value would never move out of the inventory account on its own. Your accountant would end up writing them off by journal every month, which is more work than coding the bill to an expense in the first place.
Counting consumables anyway, for control
Expensing consumables does not mean ignoring them. Chemicals are expensive, some are hazardous, and running out of chlorine on a Saturday is its own kind of disaster. A monthly count gives you control without the stock accounting.
Two ways to do it:
- A count sheet. A simple list of consumables per storeroom, with the count, the date and who counted. Compare it with what was bought that month. A big gap between purchases and what is left is worth a question.
- Warehousing locations. If you already use the Warehousing add-on, a business keeps stock locations on the server, such as a plant room or cleaning cupboard, with the quantity on hand at each, and a stock count sets the quantity to what was counted. This only works if the consumables are set up as products, so give them a clear category such as "Not for sale" and make sure no till ever sells them.
For a small club, the count sheet is usually enough. The point of either is the same: you notice when usage jumps, whether from a leak, waste or items walking out of the door.
A rule to agree with your accountant
Expensing on purchase is simple, but it can distort a month or a year if you buy a large quantity at once. A club that buys a full season's pool chemicals in its last month of the financial year would show the whole cost in that year, even though most of it will be used in the next.
ACCA's article on adjustments to financial statements covers the main year-end adjustments, including inventory and prepayments. Agree a simple rule with your accountant, for example:
- Consumables are expensed when the bill is recorded.
- At year end, if the unused stock of any consumable is large, it is counted and your accountant posts a journal to carry it into the next year.
- The count sheet is kept as the evidence for that journal.
A journal must balance and cannot be dated in a closed month, so plan the year-end count before the books are closed.
For products that are sold and do need stock accounting, see counting stock and writing off expired supplements, and for ordering both kinds of item through the right screen, read which purchase order screen to use.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
