You Sold NGN400,000 and Restocked With It. How Do You Record That?

You sell ten phones at NGN40,000 each. NGN400,000 lands in your hand. By evening you’re back at the market spending the whole NGN400,000 on new phones, because that’s how the business runs — the money doesn’t rest.

Then you sit down to write it in your book, and you stop. Do you write NGN400,000 in and NGN400,000 out? Does that mean you made nothing? Was the restock an expense? Did the profit disappear?

It didn’t disappear. But how you record this one afternoon decides whether your books tell you the truth for the rest of the year, and most owners record it the wrong way.

These are two transactions, not one

The mistake starts here. In your head it was one event: money came in, money went out, net zero. In your books it has to be two completely separate things, because they have nothing to do with each other.

The sale is the sale. Ten phones left your shop and NGN400,000 came in. That happened, it’s finished, and it has a profit attached to it.

The restock is the restock. You bought twelve new phones. That is a fresh transaction with a fresh supplier at a fresh price, and it has nothing to do with which money you used to pay for it. If your uncle had lent you the NGN400,000 instead, you’d record the restock in exactly the same way.

The fact that the same notes paid for both is a coincidence of timing. Your books don’t care where the money came from. They care what left your shelf and what arrived on it.

Step 1: Record the sale

Ring it up as a normal sale — in Mayloo that’s New Sale, add the ten phones, pick how the customer paid, done.

What matters is what happens underneath. The sale records NGN400,000 of revenue, and it goes and finds what those ten specific phones actually cost you when you bought them — say NGN30,000 each, NGN300,000 for the ten. That NGN300,000 is your cost of goods sold, and the gap between the two is your real profit on the deal:

Notice what isn’t in that table: the restock. Your profit on this sale was decided the moment the phones left your shop. Nothing you do with the money afterwards changes it.

This is the part that trips people up. Most owners work out profit by watching their account balance, so if the balance ends the day where it started, they conclude they made nothing. But the balance is not the scoreboard. If you’re still measuring the business by what’s in your account, read revenue is not profit — it’s the same trap from a different angle.

Step 2: Record the restock

Now the new stock. You bought twelve phones at NGN32,000 each — NGN384,000 — and paid a driver NGN16,000 to bring them to the shop. That’s the full NGN400,000 gone.

You have two ways to record the goods, and it’s worth knowing which you need.

Just receiving it. Inventory, then Receive Stock. Product, quantity, cost per unit. Fastest option, and it’s enough for your numbers to be right. Use it when you bought from the market and there’s no formal order to track.

A purchase order. Create the PO under Purchase Orders, then receive against it when the goods land. Slower, but you get the supplier paper trail: what you ordered versus what actually turned up, the supplier’s invoice number, a record with a number on it. Use it for suppliers you deal with regularly, or any delivery big enough that a shortfall would hurt.

Either way, the important thing happens automatically: a new stock batch is created at NGN32,000 per unit. That figure is what makes your next sale calculate correctly, which is why entering the real cost — not a rounded guess — is the whole game.

And the NGN16,000 you paid the driver? That one is an expense. Insights, Expenses, Add Expense, category Transport. The transport is a cost of running the shop. The twelve phones are not.

The mistake that will wreck your books

Here it is, plainly: never record a stock purchase as an expense.

It’s the single most common error owners make when they move from a notebook to a proper system, and it’s understandable — money left your hand, so it feels like a cost. But buying stock isn’t spending, it’s swapping. You gave up NGN384,000 of cash and received NGN384,000 of goods. Your total worth didn’t change at all. It changed shape.

The cost of those goods does eventually hit your profit, but on the day they’re sold, not the day they’re bought. That’s the entire point of cost of goods sold: it waits for the sale, then matches the cost to the money it earned.

So if you also log the purchase as an expense, you’ve counted the same NGN384,000 twice. Look at what that does to a good month:

Same afternoon. Same phones. Same money. One version shows a shop that made NGN84,000; the other shows a shop that lost NGN300,000 and should probably close.

And it doesn’t stop at one bad number. That phantom loss follows you into every decision: you’ll think your prices are too low, that a product isn’t worth stocking, that the branch is failing. Owners have dropped good product lines over a loss that only ever existed in the way it was written down.

This is why Mayloo’s expense categories are rent, transport, packaging, utilities, salaries, marketing, maintenance and supplies — with no category for stock. There isn’t one because stock doesn’t belong there. If you’re reaching for “Supplies” to log goods you plan to resell, stop and use Receive Stock instead.

What your reports will show afterwards

Record it properly and here’s the picture across the app, all of it correct at the same time:

• Profit shows NGN100,000 gross on the sale, because it costed those exact phones at what you exactly paid.
• Money Flow shows NGN400,000 in and NGN400,000 out — the stock purchase counts as an outflow the moment the goods are received, and the transport as an expense. Net movement, zero.
• Branch P&L shows NGN84,000 net profit: NGN100,000 gross, minus the NGN16,000 transport.
• Balance sheet shows your inventory value up, because the profit didn’t leave — it moved onto your shelf.

Now hold two of those side by side: NGN84,000 profit, and NGN0 more cash than you started with. Both are true. Neither is a mistake. The profit is real, it’s just currently in the form of two extra phones instead of naira.

Get comfortable with that sentence and you’ve understood most of small-business accounting. Every shop that restocks aggressively lives in this gap, and it’s the reason a busy, genuinely profitable shop can still struggle to find money for rent. We wrote a whole piece on it: cash flow vs profit.

The bonus you get for recording it properly

There’s a reason to do this beyond neat books, and in this market it’s worth real money.

The phones you sold cost NGN30,000. The ones you just bought cost NGN32,000. Prices moved, as they do. Because each purchase is recorded as its own batch at its own cost, Mayloo knows the difference — the old phones are still costed at NGN30,000 and the new ones at NGN32,000, and each sale is measured against what that particular unit actually cost.

Lump everything together and you lose this. Your margins turn into an average of an average, and by the time you notice your cost has climbed NGN2,000 while your selling price hasn’t moved, you’ve sold a lot of phones for less profit than you thought. Watching your cost per unit climb is exactly the signal that tells you when your prices need to move, and you only get that signal if the real cost went in on the day.

Recording your restock properly isn’t paperwork. It’s how you find out that your margin is quietly shrinking, months before your bank balance tells you.

If you also track your bank and cash accounts

Most owners can stop at the two steps above. Everything will be right.

If you go further and track balances for your bank account and cash register inside Mayloo, add one more record: the money you paid the supplier. Insights, Ledger & Payments, record a payment, direction Paid Out, NGN384,000. That’s what takes the money out of the account you actually paid from.

One warning, and it matters: don’t record a matching “Received” payment for the sale itself. Mayloo already counted that NGN400,000 as money in the moment you rang up the sale. Adding a payment on top counts the same money twice and inflates your income. Only record a “Received” payment when the money arrives separately from the sale — a customer settling an invoice they owed you from last month, for instance.

The whole thing, in four lines

1. Ring up the sale. Your profit is the selling price minus what those goods cost you.
2. Receive the new stock at the cost you actually paid — Receive Stock, or a purchase order.
3. Log only the running costs as expenses. The transport, yes. The goods, never.
4. Expect profit and cash to disagree. That’s not an error, that’s your money sitting on the shelf.

Doing this by hand across a few hundred transactions a month is where it falls apart — not because it’s hard, but because remembering which batch a phone came from, three weeks and forty sales later, is not something anyone does reliably. That’s the actual job Mayloo is doing in the background: costing every sale against the batch it came from, so the profit you see is the profit you made. It runs on your phone, in Naira, and it’s free for your first three months.

Curious what recording things loosely has already cost you? Our free profit leakage calculator puts a figure on it. No signup needed.

Your money didn’t vanish. It just changed shape.

Try Mayloo Free →