22 August 2026
Why your profit number is wrong without cost of goods
Ask most shop owners what they made this month and they'll tell you sales minus expenses. Rent, transport, wages — subtract those from what came in, and that's profit. It feels right. It's also missing the biggest cost in the business: the goods themselves.
What cost of goods actually means
Say you buy a bag of rice for ₵180 and sell it for ₵220. Your sale is ₵220. But you didn't just earn ₵220 — you spent ₵180 to have something to sell in the first place. That ₵180 is cost of goods: what it cost you to acquire or make what you sold, separate from rent, transport, or anything else it takes to run the shop. Miss it, and a ₵220 sale looks like ₵220 of pure profit. It isn't. It's ₵40.
Why "sales minus expenses" lies to you
A shop that sells ₵5,000 worth of goods in a month, spent ₵3,800 buying that stock, and paid ₵400 in rent and transport looks — by the sales-minus-expenses method — like it made ₵4,600. The real number is ₵800. That's a five-times difference, and it's the difference between a shop owner who thinks business is booming and one who actually knows whether it is. This gap gets worse the bigger the shop gets, because stock cost usually grows faster than rent or transport does.
How Yourcountant handles this for you
When you record a sale from stock you've added to the app, Yourcountant already knows what that item cost you — you entered it when you stocked it. So cost of goods gets pulled out automatically in Reports, and the profit figure you see is the real one, not the inflated one. If you're recording sales without linking them to stock (a quick "General Sale" entry), there's nothing to calculate cost of goods from — so for anything you buy to resell, it's worth the extra few seconds to add it as stock first.
The one habit that fixes this
Every time you buy something to resell — not rent, not fuel, the actual goods — add it to your stock in the app with what you paid for it. That single habit is what turns your profit number from a guess into something you can actually trust.
Keep records like this for your own shop
Free to start — sales, expenses, stock and debts, no card required.