Postage and Carriage

This Overheads code records the cost of postage and carriage incurred in running the business. As an expense account, it normally carries a debit balance: debit entries increase the balance (recording new costs) and credit entries decrease it (for example, correcting an error or a refund received).

Real-world examples

E-commerce or retail

Shipping parcels to customers under a courier business account (DPD, Evri and similar), invoiced weekly. Courier services from private operators are standard-rated, so a £960 invoice (£800 net of VAT) is a debit of £800 to 7501 (Postage and Carriage), a debit of £160 to 2201 (Purchase Tax Control Account), and a credit of £960 to 2100 (Creditors Control Account). For a high-volume retailer this can be one of the largest lines in overheads and is watched closely against sales volume.

Consultancy or professional services

Rarely posts here at all — the occasional signed-for letter or court bundle sent by Royal Mail. Royal Mail's public postal service is VAT-exempt, so a £12 stamp cost is simply a debit of £12 to 7501 and a credit of £12 to bank, with nothing posted to 2201 — there's no VAT to reclaim on an exempt supply.

Commonly confused with

Because code 7500 (Printing) sits right next to this one in Overheads, it's a common mis-posting target. Code 7501 is specifically for postage and carriage, while 7500 covers printing — similar in nature, but keeping them separate is what makes the overheads section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

An error posting to Postage and Carriage won't change total overhead spend, but it will distort the overheads breakdown that's usually reviewed line by line each month to spot cost creep.

Other codes in Overheads