You are on page 1of 12

Office Documents

Invoice
An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the sale transaction only. Payment terms are independent of the invoice and are negotiated by the buyer and the seller. Payment terms are usually included on the invoice. The buyer could have already paid for the products or services listed on the invoice. Buyer can also have a maximum number of days in which to pay for these goods and is sometimes offered a discount if paid before the due date. In the rental industry, an invoice must include a specific reference to the duration of the time being billed, so in addition to quantity, price and discount the invoicing amount is also based on duration. Generally each line of a rental invoice will refer to the actual hours, days, weeks, months, etc., being billed. From the point of view of a seller, an invoice is a sales invoice. From the point of view of a buyer, an invoice is a purchase invoice. The document indicates the buyer and seller, but the term invoice indicates money is owed or owing. In English, the context of the term invoice is usually used to clarify its meaning, such as "We sent them an invoice" (they owe us money) or "We received an invoice from them" (we owe them money). There are different types of invoices:

Pro forma invoice In foreign trade, a pro forma invoice is a document that states a commitment from the seller to provide specified goods to the buyer at specific prices. It is often used to declare value for customs. It is not a true invoice, because the seller does not record a pro forma invoice as an accounts receivable and the buyer does not record a pro forma invoice as an accounts payable. A pro forma invoice is not issued by the seller until the seller and buyer have agreed to the terms of the order. In few cases, pro forma invoice is issued for obtaining advance payments from buyer, either for start of production or for security of the goods produced. Credit memo - If the buyer returns the product, the seller usually issues a credit memo for the same or lower amount than the invoice, and then refunds the money to the buyer, or the buyer can apply that credit memo to another invoice. Commercial invoice - a customs declaration form used in international trade that describes the parties involved in the shipping transaction, the goods being transported, and the value of the goods.[6] It is the primary document used by customs, and must meet specific customs

requirements, such as the Harmonized System number and the country of manufacture. It is used to calculate tariffs.

Debit memo - When a company fails to pay or short-pays an invoice, it is common practice to issue a debit memo for the balance and any late fees owed. In function debit memos are identical to invoices. Self-billing invoice - A self billing invoice is when the buyer issues the invoice to himself (e.g. according to the consumption levels he is taking out of a vendor-managed inventory stock). The buyer (i.e. the issuer) should treat the invoice as an account payable, and the seller should treat it as an account receivable. If there is tax on the sale, e.g. VAT or GST, then buyer and seller may need to adjust their tax accounts in accordance with tax legislation.[7] Evaluated receipt settlement (ERS) - ERS is a process of paying for goods and services from a packing slip rather than from a separate invoice document. The payee uses data in the packing slip to apply the payments. "In an ERS transaction, the supplier ships goods based upon an Advance Shipping Notice (ASN), and the purchaser, upon receipt, confirms the existence of a corresponding purchase order or contract, verifies the identity and quantity of the goods, and then pays the supplier."[8] Timesheet - Invoices for hourly services such as by lawyers and consultants often pull data from a timesheet. A Timesheet invoice may also be generated by Operated equipment rental companies where the invoice will be a combination of timesheet based charges and equipment rental charges. Invoicing - The term invoicing is also used to refer to the act of delivering baggage to a flight company in an airport before taking a flight.[citation needed] Statement - A periodic customer statement includes opening balance, invoices, payments, credit memos, debit memos, and ending balance for the customer's account during a specified period. A monthly statement can be used as a summary invoice to request a single payment for accrued monthly charges. Progress billing used to obtain partial payment on extended contracts, particularly in the construction industry (see Schedule of values) Collective Invoicing is also known as monthly invoicing in Japan. Japanese businesses tend to have many orders with small amounts because of the outsourcing system (Keiretsu), or of demands for less inventory control (Kanban). To save the administration work, invoicing is normally processed on monthly basis. Continuation or Recurring Invoicing is standard within the equipment rental industry, including tool rental. A recurring invoice is one generated on a cyclical basis during the lifetime of a rental contract. For example if you rent an excavator from 1 January to 15 April, on a calendar monthly arrears billing cycle, you would expect to receive an invoice at the end of January, another at the end of February, another at the end of March and a final Offrent invoice would be generated at the point when the asset is returned. The same principle would be adopted if you were invoiced in advance, or if you were invoiced on a specific day of the month.

Electronic Invoicing is not necessarily the same as EDI invoicing. Electronic invoicing in its widest sense embraces EDI as well as XML invoice messages as well as other format such as pdf. Historically, other formats such as pdf were not included in the wider definition of an electronic invoice because they were not machine readable and the process benefits of an electronic message could not be achieved. However, as data extraction techniques have evolved and as environmental concerns have begun to dominate the business case for the implementation of electronic invoicing, other formats are now incorporated into the wider definition.

Utility bills

Bills from utility companies are based on measured (metered) use of electricity, natural gas or other utilities at a residence or business.[9][10] When an individual or business applies for service from the utility (opens an account), he can signs an agreement (contract) to pay for his metered use of the utility.

Purchase ledger

A purchase ledger is a system in accountancy by which a business records and monitors its creditors. The purchase ledger contains the individual accounts of suppliers from whom the business has made purchases on credit. Information on invoices and credit notes received, and payments made, are recorded in the supplier's account using the debits and credits system, with the balance of each account at a given moment representing the amount currently owed to that supplier. Historically, the purchase ledger was maintained in book form, hence the term ledger, but in modern practice it is much more likely to be held on computer using accountancy software or

a spreadsheet. The purchase ledger will ordinarily hold a credit balance, unless credit notes or over-payments exceed the credit balance.order form). The purchase ledger will ordinarily hold a credit balance, unless credit notes or overpayments exceed the credit balance.order form)

Debit Note

A document used by a purchaser to inform a vendor of the quantity and dollar amount of goods being returned, and requesting that the dollar amount be returned to the purchaser. A debit note is often used to return goods on credit. The vendor then issues a credit note to the purchaser indicating that the goods have been received, and that the purchaser will not have to pay for them. Also known as a "debit memo".
Debit notes are generally used in business-to-business transactions. Such transactions often involve an extension of credit, meaning that a vendor would send a shipment of goods to a company before the goods have been paid for. Although real goods are changing hands, until an actual invoice is issued, real money is not. Rather, debits and credits are being logged in an accounting system to keep track of inventories shipped and payments owed.

Receipt
A receipt is a written acknowledgment that a specified article or sum of money has been received. A receipt records the purchase of goods or service obtained in an exchange. A receipt and a bill are not the same, they are two different things.

In English speaking countries, the term most frequently applies to the printed record given to a consumer at checkout that lists the purchases made. The total amount of the transaction including taxes, discounts and other adjustments, the amount paid and the method of payment. Increasingly, these receipts may also include messages from the retailer, warranty or return details, special offers, advertisements or coupons. Receipts may also be provided for non-retail operations such as banking transactions. A receipt is a legal document.[2] In many countries, notably the United States of America, it is mandatory by law for retailers, and individuals, have to show receipts and store information about every receipt, so that the tax authority, or IRS can check that sales are not hidden

Order Form

A purchase order (PO) or Order From is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services the seller will provide to the buyer. Sending a purchase order to a supplier constitutes a legal offer to buy products or services. Acceptance of a purchase order by a seller usually forms a contract between the buyer and seller, so no contract exists until the purchase order is accepted. It is used to control the purchasing of products and services from external suppliers.[1] Creating a purchase order is typically the first step of the Order-to-cash process in an ERP system. Examples of SaaS providers automating this process include TradeCard and GT Nexus.

BANKING DOCUMENTS Deposits or pay-in-slip Cheques Demand drafts Debit and credit note Vouchers DEPOSITS AND WITHDRAWALS SLIP:

The deposits are made by filling up a pay-in-slip. The form of the pay-in-slip is: It is used to deposit money in the bank and returned to the depositor. It has the signature of the cashier, as receipt. It gives the details regarding the date, the amount deposited.

CHEQUES A cheque is an unconditional order on the bank made by the client instructing the bank to pay a certain sum of money to the person named in the cheque or his order or the bearer. This instrument is very safe and convenient method of making payments or withdrawing money from a bank.

TYPES OF CHEQUES 1.OPEN CHEQUE 2.CROSSED CHEQUE

OPEN CHEQUE: An open cheque is one which is payable across the counter of the bank. It need not be paid through a bank. It can be encashed at the counter of the bank. An open cheque can further be of two types: a. BEARER CHEQUE: When a cheque is payable to a person named in the cheque or to the bearer thereof, it is called a bearer cheque. For e.g. pay to Rakesh Kumar Garg or bearer. Such a cheque may be paid to Rakesh Kumar Garg at the counter of the bank when he presents it for payment. Mr. Rakesh Kumar Garg can either himself go to bank for getting payment or simply he may or may not sign at the back side of the cheque and hand it over to any person. Any person can go to the bank and collect its payment. The drawee bank need not take any pains to get the identification of the person to whom the payment to whom the payment is being made. A bearer cheque is transferable merely by delivery. b. ORDER CHEQUE: An order cheque is payable to the person named in the cheque or his order. For e.g. pay to Rakesh Kumar Garg or order. Such a cheque is payable to either Rakesh Kumar Garg or to any person whom he orders the payment of the cheque. Order cheque is paid by the bank only when the bank is satisfied about the identity of the payee. An order cheque is not transferable merely by delivery. It cannot be transferred without the signatures of the transferor.

CROSSED CHEQUE:

A crossed cheque is one on which two parallel transverse lines with or without the word & co. not negotiableetc. are drawn. A crossed cheque is not payable across the counter of the bank. It must be collected through a bank. It is paid into the bank account of a person and cannot be encashed at the counter of the bank. By crossing cheques safety is ensured and the person to whom payment is eventually made can be traced because such a cheque is always paid into a bank account. A crossed cheque provides protection not only to the holder of the cheque but also to the receiving and collecting bankers. Types of Crossing a) General Crossing b) Special Crossing

Other Types of Crossing 1. Restrictive Crossing 2. Not Negotiable Crossing 3. Double Crossing

Passbook:

A bank statement is a summary of all financial transactions occurring over a given period of time on a deposit account. A passbook is a paper book used to record transaction on a deposit account. If the deposit account has no passbook such as a checkable account or credit card account, the bank will issue statement for you in a given time period.If the deposit has a passbook, the book is statement.

BANK DRAFT:

Bank draft is a bill drawn either on demand or otherwise by one banker on another in favour of a third party or by one branch of a bank on another branch of the same bank or by the head office of a branch or vice versa for a sum of money payable on demand or order. It is also known as demand drafts as they are always payable on demand without any days of grace and there cannot be any bearer drafts. They are always used as a mode of remittance by parties for sending money from one place to another. For the preparation of this draft bank charges a nominal commission for this service. Demand Draft:

DIFFERENCE BETWEEN CHEQUE AND DEMAND DRAFT

DEMAND DRAFT It cannot be made payable to bearer. Its payment cannot be stopped. It is drawn by a bank upon itself.

CHEQUE It may be drawn payable to bearer. It is countermanded as in case of a cheque. A cheque is drawn by one person upon another

DEBIT NOTE It is a document evidencing that a debit to be raised against a party for other reasons, for e.g., when goods are returned to a supplier or when an additional amount is recoverable from a customer. CREDIT NOTE It is made out when a party is to be given a credit except against the bill already received from it. When goods are received back from a customer, a proper credit note should be given to him. VOUCHER It is a document providing evidence of some business transaction. It is clear from the above definition that whenever a transaction takes place, an evidence to that effect is also established Types of vouchers: a. Source vouchers b. Accounting vouchers

CHEQUE CROSSING

MEANING The act of drawing two parallel transverse lines on the face of a cheque is called crossing of a cheque. It is a direction to the banker not to pay the cheque across the counter of the bank but to pay to a bank only or to particular bank in account with the bank. The amount in this cheque is paid into the bank account of the respective person whose name is being mentioned on the cheque. Types of crossing: a) General crossing b) Specific crossing

GENERAL CROSSING General crossing implies simply putting two parallel transverse lines on the face of cheque. According to section 123 of the negotiable instruments act, 1881 says, where a cheque bears across its face an addition of the words and company, or any abbreviation thereof; between two

parallel lines or just two lines without any negotiation will be considered a generally crossed cheque.The effect of general crossing is that payment of such a cheque cannot be obtained at the counter of the bank, it can only be obtained through a banker. SPECIAL CROSSING A special crossing implies a direction written on the face of a cheque to pay the cheque only if it is presented through a particular bank mentioned therein. the cheque is deemed to be crossed specially. In this the amount is transferred to the mentioned name a/c. RESTRICTIVE CROSSING: It constitute a direction to the collecting banker to collect the cheque and credit the proceeds to the account of the payee only. Such a crossing is known as RESTRICTIVE CROSSING. The collecting bank has to credit the account of the payee in whose favour the cheque is drawn. NOT NEGOTIABLE CROSSING: It makes the cheque non transferable but the effect of such a crossing is that when the holder to a cheque transfers it to any other person the transferee does not get a better title than the transferor had even though the transferee is a bonafide person who takes the instrument for a valid consideration and before the maturity of the instrument. DOUBLE CROSSING: PERSONS WHO MAY CROSS A CHEQUE: A cheque may be crossed by any of the following: 1. The drawee of the cheque 2. The holder of the cheque 3. The collecting banker