I would change it back, the Materials part.
Only because, when you, and you should, start adding a mark-up on your Materials, the "profit" amount on the Materials will show up as income. You will need to show as much income as possible when it comes time to do financing.
The cost of the Materials, the price you paid for them, should appear on the reports as expenses, or cost of goods depending on the software you are running.
Having said that, you should talk to an accountant, as they can advise you better depending on your application.