Recording stock purchases so inventory adds up

How a shop codes supplier bills for stock to the inventory account, so its balance sheet and cost of sales make sense alongside what the till posts.

By Achekam · 11 October 2026 · 5 min read · For Retail businesses in South Africa, Nigeria, Kenya

Ask a shop's bookkeeper where the supplier invoices for stock go, and you will often hear "purchases" or "cost of sales". It is the habit of a cash-based world: the shop paid for the goods, so the money is spent. On a till that records cost of sales with every sale, that habit quietly breaks the books.

The reason is simple once you see it. If the purchase goes straight to an expense and the till also records cost of sales when the goods are sold, the same stock is expensed twice, and your inventory account heads below nothing. This article explains how to record stock purchases in Achekam so that the inventory account, cost of sales and your margin all make sense together.

Stock bought is an asset until it is sold

A box of school shoes on your storeroom shelf is not a cost yet. It is something the business owns and will turn into a sale. In the books it belongs in inventory, an asset on the balance sheet, until it is sold. Only then does its cost move to cost of sales, next to the revenue it earned.

That is how the till already behaves. Every till sale that reaches the server posts a balanced journal that, alongside the payment, revenue and VAT, debits cost of sales and credits inventory at the product's cost price. The till assumes the goods were in inventory to begin with. Your supplier bills have to put them there.

Coding stock bills to the inventory account

A business records supplier bills line by line, with VAT. A bill without a purchase order waits for approval before it posts, and it can then be paid in full or in parts from the bank account you choose.

When the bill is for stock you will sell, code the lines to the inventory account (1300 in the standard chart), not to an expense. Each business has its own double-entry ledger with a standard chart of accounts, and accounts can be added, renamed or switched off, so if your shop keeps separate inventory accounts for different ranges, your accountant can add them.

Not every line on a supplier bill is stock:

VAT on each line goes to input VAT, where you are registered and can claim it, not to inventory.

Till sales moving cost out of inventory

With bills coded to inventory and the till taking cost out with each sale, the inventory account behaves as it should: purchases go in, sales come out. Its balance at any time is, in principle, the cost of the stock still in the shop.

In principle, because the till takes cost out at the single cost price typed on each product. If you paid a supplier more than that figure, the bill puts more into inventory than the till will ever take out for that line, and the difference stays behind. Your accountant will see it at month end as an inventory balance higher than the counted stock is worth.

Quantities and value: two records that do not talk to each other

The value in the ledger and the quantities on the shelf are kept in two different places, and today they are not connected in either direction:

• Deliveries do not add quantities. Goods received against a purchase order do not add stock, so the till's quantities do not rise when a delivery is booked in. The bill puts the value into inventory; the quantity has to be brought in separately, usually by a count.
• Quantity changes do not move value. Stock counts, wastage, transfers and opening quantities do not post to the general ledger. Only till sales and till returns move the inventory account.

So the inventory account and the stock records can drift apart from both ends. That is not a reason to stop coding bills to inventory; it is a reason to compare the two regularly. Losses that never reach the ledger on their own are dealt with in writing off damaged, expired and missing stock.

Order-matched bills and the duplicate guard

For regular stock suppliers, buying through purchase orders adds two protections. A supplier invoice recorded against an order is matched with what was ordered and what arrived, and held until someone writes a resolution note if price or quantity differ. Posting the matched invoice puts it in the ledger as expense, input VAT and trade payables, and the supplier's invoice number stops it being posted twice.

Note the word "expense" in that posting. Ask your accountant how they want order-matched stock invoices to reach inventory, so that this route and the direct bill route end in the same place. Restaurants face similar choices with food deliveries; see food and beverage supplier bills.

A month-end comparison with your accountant

Once a month, sit down with your accountant and compare:

1. The inventory account balance in the ledger.
2. The value of stock on hand: counted quantities times cost prices.
3. The month's stock purchases on bills, against the month's cost of sales from the till.

When they disagree, the usual suspects are stale cost prices, unrecorded losses, and bills coded to the wrong account. Agree a journal for what you find. ACCA's article on adjustments to financial statements explains how inventory and other period-end adjustments are processed, which is the kind of entry this comparison leads to. Reading the margin that results is covered in reading your shop's gross margin from the books.

Look at last month's supplier bills for stock and check which account each line was coded to. If they went to an expense, raise it with your accountant before the next month closes.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.