P1 Identifying the Documents Used to Record Business Transactions

P1 Identifying the Documents Used to Record Business Transactions 1. Issue of a Purchase Order Apurchase order (PO)is scroll issued by the vendeeto the vendor, indicating types, quantities, and agreed tolls for products or operate the trafficker will add to the emptor. Sending a purchase order to a supplier is a legal offer to buy products or services. If the seller agrees to selling to the buyer it forms a contract between the two. It should hold * The order play, so it fag end be traced and paired with telephone circuit relationship lines and statements * The purchasers name and address which is usually across the middle of the put down * The price The name and address of the supplier * The catalogue/reference number * Authorisation i. e. touch and date * A description of the goods required The obstetrical delivery Address May Be Different Companies use Purchase Orders for several(prenominal) causes price * Purchase orders allow buyers to clearly and explicitly c ommunicate their intentions to sellers * Sellers ar protected in case of a buyers refusal to pay for goods or services * Purchase orders help a purchasing agent to manage accounting entry orders and pending ordersIf The Order Is non Properly Authorised It Will not Be Processed 2. spoken language Note This is the document is move with the goods. It lists the items which micturate been sent. The buyer uses this to check the goods ordered have arrived. It is signed by the buyer and it is indeed sent back to the seller as a proof of delivery. The person receiving the goods signs it afterwards checked the quantity of the goods delivered. Information on the Delivery Note * The method of delivery * Purchase order number * The signature of the person receiving the goods * The catalogue number and quantity The Price Is Usually Not On the Delivery Note 3. InvoiceAn handbill is a document issued by asellerto thebuyer, indicating theproducts, quantities, and agreedpricesfor products or servicesthe seller has provided the buyer. An invoice indicates the sale transaction only. Payment terms are usually include on the invoice. The buyer can also have a upper limit number of days in which to pay for these goods and is sometimes offered a terminate if paid before the collect date. This is probably the most important document. This is an formal request for payment. It includes * The WordInvoice * A Unique Reference phone number In Case Of Correspondence Ab step to the fore The Invoice * Date of the Invoice. revenue Payments * Name And Contact Details Of The Seller * Tax Or participation Registration Details Of Seller * Name And Contact Details Of The purchaser * Date That The Product Was Sent Or Delivered * Purchase Order count * Description Of The Products * Total Amount Charged optionally with breakdown of taxes, if pertinent * Payment Terms method of payment, date of payment, and enlarge about charges for upstart payment * The Purchase Order Number the i nvoice is checked against the goods ordered, the invoice and the goods delivered, the process is called marrying up. The buyer only pays if all three documents match exactly. Terms this informs the buyer how long before he has to pay for the goods. The heart of cash discount for fast payment will also be stated. * Carriage this states the cost of transportation the seller has to pay. Carriage forward manner how much the buyer has to pay for transportation * E OE errors and omissions expected this allows the seller to pass up any mistakes on the invoice at a posterior date. * Trade Discount this heart will be deducted from the invoice price e. g. buying in bulk. * Value Added Tax (VAT) this is added to the cost of the goods on the invoice. get word also Recording General Fund operate Budget and Operating TransactionsThe VAT registration number should be on the invoice, usually infra the name and address. * Invoice Number it will identify a peculiar(prenominal) invoice for the buyer and seller. Pro Forma Invoice VAT It means for forms sake. It is sent to a new customer, or an existing customer who has been late fashioning a payment It is sent to the buyer before the goods are delivered The details are the same as on an ordinary invoice. The goods are delivered after the payment has been made.When the goods are paid for a normal invoice is issued. It sets out charges which have to be paid in advance. Debit Note This is issued by the seller and sent to the buyer. It Is Essentially an Additional Invoice It is used to correct errors e. g. if goods were invoiced at a lower price than it should been or if some goods were everywhere charged. 4. Credit Note Acredit denounce is a document issued by asellerto abuyer. The seller usually issues a credit memo for the same or lower amount than the invoice, and then repays the money to the buyer or sets it off against a balance due from other transactions.A credit whole step lists the products, quantities and agreed prices for products or services the seller provided the buyer, but the buyer returned or did not receive. It may be issued in the case of damaged goods, errors or allowances. In respect of the previously issued invoice, a Credit Memo will reduce or eliminate the amount the buyer has to pay. Reasons for issuing a credit note * To correct a mistake e. g. being over charged * Goods are faulty or damaged * The goods were not delivered * The wrong goods were delivered Details on the credit note include The date * The original invoice number * Date * The reason credit is being given * The addresses of the buyer and seller It Is Often Printed In Red 5. Statement The seller sends all regular customers a statement at the end of the month. This Is a Copy of The Customers Accounts in The Sales Ledger. It lists all transactions with customers during the month * Any payments received * each invoices issued * It shows outstanding balance * Any credit note issued Details include * Date * Details of invoices issued * The name and address of the customers The customers account number * The name and address of the supplier * Any credit note issued * Any payments made * The amount outstanding i. e. the balance 6. Goods Received Note(GRN) This is an internecine document used by the buyer, usually in the stock section to record goods being delivered. Copies are sent to various parts of the business * The department that ordered the goods, to let them know that goods have arrived * The accounts department so they can marry the invoice, the purchase order and the GRN * The purchasing department who displace the order.