Purchase Documents
Orders placed ( see Example 1)
1) Orders placed is an order form telling a company how much of a good they need. For example a newsagent would send one of theses to Coca-Cola telling them how many cans of Coke they would like to purchase. On the document would be the business address, the quality of the product and the date.
A purchase order is used to for a organisation to order goods that a business needs to run normally or an order from a consumer wanting something on request which the department store didn’t have. As shown below, it shows a purchase order from Sports division/JJB Hayes, that a customer wanted a basketball set. Being that a purchase order is a inward transaction for a business that consumer would have to pay £149.99, and the company would make there money within that amount.
Purchase Invoice (see Example 2)
2) A purchase invoice is made by the supplier and sent to the customer. This document will show in detail the quality and description of the goods that have been sent. It also contains detailed pricing including things like VAT so you can work out if the amount to pay is right. It is necessary to show the business VAT No so the VAT inspectors and the inland revenue can use it as evidence of the amount the business has spend.
Credit Note (see Example 3)
3) A credit Note is used when the customer finds a fault in the product or when the customer buys the wrong product. The Credit Note acts as a receipt. In the event of this happening the company will supply the customer. Another occasion a business would compete a credit note is when goods are not delivered because they were lost or stolen.
Goods Received Note (see Example 4)
4) This documents is a record of the goods being actually delivered. It is produced by the supplier and the customer will sign this when the goods are delivered. The note is checked against the deliver note to make sure the right goods are delivered.
The person who receives the goods completes a G.R.N, would do this for his own records to make sure everything he ordered is correct and not damaged
Purchase Documents
An Order placed document
Example 1
FORM
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A goods received Note Example 2.
Form
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Credit Note Example 3.
Form
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A Purchase Invoice Example 4.
form
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Sales transactions
1) Goods
2) Services
3) Business to Business
4) Business to Consumer
Sales Documents
1) Orders received
2) Sales invoice
3) Delivery Note
4) Sales Credit Note
5) Statement of Account
6) Remittance Advice
For Businesses to survive they need to rely on customers buying their goods or services sales can also come from other businesses or members of the public.
1) Goods
are what are sold to the customer .For example businesses like wholesalers and retailers sell goods. Goods are tangible things, they are used up. Goods are made up of materials like woods, food and cotton.
2) Services
Services are sold also but are not tangible, you can’t see them. A service is a skill which is provided in order to help the customer or business. Services include National Health, Banking, Teaching and the police.
3) Business to business
Businesses can offer their goods and service to other business. For example an airline company will purchase the services of a catering company. They do this so they don’t waste time making their own food.
4) Business to customer
Business also sell goods and services to customers or individuals. For example banks offer their financial services to individuals who need loans or advice.
Sales Documents
1) Order received ( see example 5)
This document is produced by the supplier and is sent to the customer. This is used to conform with the customer what they have ordered. Details like the product description and how many they require are written down.
2) Sales Invoice (see Example 6)
This document is sent to the customer to tell them how much they owe. Its similar to the purchase invoice and includes things like VAT and discounts. Also it includes the description of the product. The sales invoice is different because its’s only issued when a good has been delivered and has not paid for unless the customer has paid immediately.
Delivery Note (see Example 7)
A delivery note is given to the customer when the goods are delivered. The documents tells you what has been delivered and how many has been delivered. Also on it is the customers address so its similar to the goods received note. This document is a security measure so the right goods end up in the right place. The delivery note is given to the driver of the truck who deliver the goods and is then passed on to the customer.
Sales Credit Note (see Example 8)
This document is used by the customer in the event of an error in the supplied goods. For example if you bought a pair of shoes returned home and found a tear in them you can ask for a refund or accept a sales Credit Note. This would allow you to return to the shop in the future and exchange the note for a good or goods of the same value. The credit note is issued by the supplier and is sent to the customer.
Statement of Account ( see Example 9)
A statement of account is sent by a supplier to a customer. It states all transactions made in the month by the customer, any money outstanding, the total amount of money due on each invoice and the total balance which has to be paid.
Remittance Advice (see Example 10)
A remittance advice slip will often accompany the statement of account form. It is sent with cheque by the customer. This slip helps the supplier accurately process the payment when it is received. The supplier issues the remittance advice slip and the customer makes use of it by matching it with the invoice or statement of account and then sends it back with the cheque or other payment, this makes it easier for the supplier to match up cheque to invoices
1) Order received ( see example 5)
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2) Sales Invoice (see Example 6)
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Delivery Note (see Example 7)
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Sales Credit Note (see Example 8)
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Statement of Account ( see Example 9)
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Sales Credit Note (see Example 8)
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Remittance Advice (see Example 10)
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Receipt Documents
1) Receipt
2) Cheque
3) paying- in slip
4) Bank statement
Payment Methods
1) Cheque
2) Cash
3) Credit Card
4) Debit Card
Receipt Documents
1) Receipts (see Example 11)
When you pay for something in cash you need some sort of proof you’re bought it. The proof you need is to collect a receipt. This is needed if you want to make a refund or if you want to exchange your product for something else. The receipt is written proof of your purchase and should include the following:- The date, Receipt number, Name of company, Description of the product, Amount paid (inc. VAT).
A copy of the receipt is kept by the payee for their records and to provide evidence of VAT for recording purposes.
Cheque (see Example 12)
When you pay for something by cheque the cheque the cheque itself is a proof of purchase so a receipt is not needed.
The cheque is similar to the receipt and will include the date and the amount. But the cheque also has the name of the person you are paying. The cheque will then be taken by that person to their bank to be cashed. A cheque is a receipt because when you pay by cheque shows up on your bank statement which acts as a receipt.
Paying-in slips (see Example 13)
Paying-in slips are used to put money into a bank account. This slip has a detachable section which is given with the cash and cheque the bank who place the money into the account. Left over is a section which is stamped to show that the money will be credited to our your account. On the slip is the amount deposited, the date and the name of the bank. Paying in slips vary from bank to bank.
Banking statement (see Example 14 )
If you have a bank account you will also have a Bank statements. These are used to tell how much you have in your account, how much money you deposited and how much you have withdrawn and to see how much you invest you have earned It also tells you where and when you took your money out. Bank statements are basically used to keep track of your money.
1) Receipts (see Example 11)
Cheque (see Example 12)
Paying-in slips (see Example 13)
Banking statement (see Example 14 )
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Payment methods
Cheque
Cheques are a simple way to pay. Many see it as easier alternative to cash. All you do is write the amount needed and the name of whom you are paying and that’s it, no receipt because the cheque acts as proof of the purchase.
Cash
Cash is the most common way to pay. Its comes in two forms, coins and banknotes. In addition to this there are different note and coins which represent different amounts. Banknotes and coins can be copied or forged so it is wise to check the notes are genuine.
Credit Card.
Credit Card are alternatives to cash or cheques. They can be used at home and abroad wherever they are accepted. Instead of handing over cash or a transaction voucher by the customer. This voucher is then sent to the bank, who then sent the customer a statement saying hour much they owe. The statement usually takes a long time to arrive so the cardholder has time to come up with the money they owe. This is the interest free period, but interest is changed if the account is not cleared in that period.
Debit Card
A Debit Card is basically a cheque book and cheque card combined. At the point of purchase the money is debited from the customers bank account, after which a transaction voucher has to be signed by the customer so that company knows the right person has used the right card. Also so the company can keep a record of whom has shopped at their establishment.
PC5
Importance of security
It is very important that financial transactions are recorded clearly and accurately to protect them from theft, fraud and criminal damage . Security checks are there to prevent fraud, theft and to ensure high standards of honesty. By constantly checking records and by special equipment which can detect security checks.
Authorisation of orders.
When an order is sent to a supplier, the customer must be sure they can pay for it . Certain people will decide
