BUSINESS FORMS

What are Business Forms?

 Business forms are used to document business transactions. Documentation is

very important in business. A business form is a picture of a business
transaction. It is the evidence of the occurrence of a transaction. It also
describes the details of the transaction. The contents of the form gives the
reader an understanding of the various aspects of the transactions such as 1.)
quality and quantity of merchandise requested, ordered or delivered 2.) price
agreed upon for the merchandise 3.) the personnel who prepared the form
and 4.) officers who authorized the transaction. Business forms are
interconnected. One business form represents a stage of a process. A set of
business forms will depict a story of a completed transaction.
Internal Business Forms

 Internal business forms are those of which used only within the company.
These forms may be used by the seller only or the buyer only. Internal
business forms document the accountability of the personnel on the
transactions that occur. The forms intend to answer the ff questions:
 1. what are the particulars requested?
 2. who initiated the transaction?
 3. who determined the correctness of the information on the form?
 4. Who gave the final authorization to implement the transaction?
Purchase Request

 A purchase requisition form is a document used by a department to request

that the purchasing department order materials or merchandise. In other
words, this form is used by departments to notify the purchasing department
that raw materials are needed for production or merchandise is needed for
the sales floor.
What Does Purchase Requisition Mean?

 To prevent fraud, department managers aren’t typically allowed to place

orders directly with vendors and supplies on the company’s behalf. Instead, a
different department creative named the purchasing department actually
places the orders with the third party vendors. The purchase requisition forms
are used by department managers to inform the purchasing department what
materials are needed.
 When a department manager sees that materials are running low, he or she
fills out a requisition form that includes a date, the manager’s name,
quantity, model numbers, details about the order, and the vendor. The
requisition form is only one step in the ordering process of a voucher system.
Let’s look at a short example of how one of these systems work.
Example

 First, a department that needs to order materials creates a purchase requisition

form. This form notifies the purchasing department that supplies are needed. The
purchasing department can approve, alter, or deny the request from the other
department. If the order is approved, the purchasing department will create a 
purchase order.
 This order form is sent to the vendor notifying them that the buyer wishes to
purchase goods. If the vendor accepts the order, it produces and delivers the goods
with an invoice. The receiving department unpacks the goods and delivers the
receiving report to the accounting department who already has the invoice and
purchase order. When all of these documents agree, the accounting department can
issue an invoice approval notice to the cashier indicating that a payment can be
made to the vendor.
 I know. This seems like a long tedious process. It is, but it is put in place to prevent
fraud purchases and protect the company assets from improper ordering.
Receiving Report

 A receiving report is an internal document used to record what materials and

inventory were received by the company. The receiving report is sent to other
departments to notify them what items have been received and are ready for
use.
What Does Receiving Report Mean?

 Most large companies and even some smaller companies have multiple
departments to handle different operations. Some common departments
include purchasing, shipping, and receiving departments. The receiving
department is used to collect or receive inventory or materials when they
arrive at the store or factory.
 The receiving department is responsible for counting shipments received and
matching the actual number received with the number on the purchase order
to see if the accurate number of goods was received. Receiving departments
are also in charge of checking packages for damaged goods. If a percentage of
goods are damage, the orders need to be returned. After the receiving
department examines the goods received, it fills out a receiving report.
Example

 Receiving reports usually include a heading with the company name, address
and date along with a receiving report number. A receiving report also
includes the date received, FOB terms, shipping company used, and a list of
items received. The items list usually has space for descriptions, prices,
quantities, and weights.
 Most receiving reports are made on carbon copy paper with multiple sheets.
Once the report is filled out, one sheet can be sent to accounting for
recording, one sheet is sent to purchasing to verify the order was purchased
and received, and one sheet is sent to the department that requested the
order. The receiving department also keeps a copy of each receiving report
on file.
Check Voucher
External Business Forms
Purchase Order

 A purchase order is the formal document issued by the procurement

department and sent to a vendor to ratify a purchase once all conditions and
details have been negotiated and agreed upon. It has the same legal status as
a contract. It must contain all the essential data from the purchase request
already mentioned above plus the issue date, delivery terms, payment terms,
payment information, supplier and company’s details and contacts.
What Does Purchase Order Mean?

 A purchase order typically lists the date of the order, 

FOB shipping information, shipping date, discount terms, name of the buyer
and seller, description of the goods, model numbers, price, quantity, and PO
number. At the very bottom of every order form there is a signature line for
the authorized manager to sign. So basically, an order includes everything
about the transaction and what the buyer expects. The seller can choose to
fulfill this order or reject the order.
 Creating an order is only one step in the process of ordering goods from
suppliers using a voucher system. In order to prevent fraudulent spending and
improper orders, most companies initiate a voucher system that provides
checks and balances in the purchasing process. Here are the simple steps in
this system.
Example

 First, a department that needs to order materials creates a purchase requisition

 form. This form notifies the purchasing department that supplies are needed. The
purchasing department can approve, alter, or deny the request from the other
department. If the order is approved, the purchasing department will create an
order.
 This order form is sent to the vendor notifying them that the buyer wishes to
purchase goods. If the vendor accepts the order, it produces and delivers the goods
with an invoice. The receiving department unpacks the goods and delivers the
receiving report to the accounting department who already has the invoice and
purchase order. When all of these documents agree, the accounting department can
issue an invoice approval notice to the cashier indicating that a payment can be
made to the vendor.
 I know. This seems like a long tedious process. It is, but it is put in place to prevent
fraud purchases and protect the company assets from improper ordering.
Delivery Receipt

 A document that is typically signed by the receiver of a shipment to indicate

that they have in fact received the item being shipped and have taken
possession of it. Most businesses that transport valuable items via mail or
parcel post will require the completion of a signed delivery receipt to make
sure that the goods were actually received by the intended recipient.
Sales Invoice

 A sales invoice can be simply defined as the request of payment by the

customer for goods sold or services provided the seller. An invoice generally
lists the description and the quantity of the item sold or service provided.
The document is also a record of the sale for both the seller and the buyer.