Document Flows Between Buyers And Sellers

1. The transaction is said to be complete after payment is made and the receipt issued as proof of payment.
2. The transaction is said to be complete after payment is made and the receipt issued as proof of payment.

Quotation Letter
The buyer sends a question letter to the seller for information about:
Quotes the items to buy.
Purchase Items:
i) Method of delivery
ii) Methods of payment

Buyer → Quotation Letter → Seller

Answer Letter
Sellers reply to buyers’ queries by including quotes and catalogs.

Seller → Answer Letter + Catalog → Buyer

Purchase Order
The buyer sends a purchase order to the seller to order the items officially.

Buyer(copy) → Purchase order → Seller(original)

Delivery Note
1. The seller sends a delivery note to the buyer along with the items ordered.
2. The buyer checked the items to confirm:
(a) All items received are items ordered in the purchase order
(b) All items in the delivery note were received in good condition.

Seller(copy) → Delivery Note + Item → Buyer(original)

1. The seller provides an invoice based on a copy of the delivery note that has been verified by the buyer.
2. The invoice is then sent to the buyer to notify them of the total price of items they need to pay.
3. Typically invoices are provided in three copies:
(a) The original invoice is kept by the buyer to be recorded in the Purchase Journal.
(b) The first carbon copy is attached to the check when payment is made.
(c) Second carbon copy is kept by the seller for reference.

Seller (copy of the second invoice) → Invoice  
Buyer →  Cheque+Copy of first invoice → Seller

Debit Note
1. The seller sends the debit note to the buyer to notify him that his account has been debited to add the amount in the invoice.
2. The debit note serves as an additional invoice.
3. Debit notes are sent to the buyer when:
(a) Original Invoice charged less (item is charged less).
(b) Notes left on the invoice (eg transportation costs, the interest charged, and commissions charged to buyers).
(c) Additional charges apply to buyers when there is an exchange of items.
(d) When charges for containers such as cans or bottles are not recorded on the invoice.

Undervalued invoice → Debit Note → Adding debts amount
→ Seller (copy) → Debit Note → Buyer (original)

Credit Note
1. The seller sends a credit note to the buyer to inform him that his account has been credited to reduce his debts (reducing the amount in the invoice).
2. Credit notes are sent to the buyer when:
(a) The buyer returns the damaged item, the wrong brand, or the item different from the item ordered.
(b) Buyers return empty containers and bottles.
(c) Buyer invoice is overcharged.
3. Credit notes are red so that they can be distinguished from other business documents.

Overcharged invoice → Credit Note → Debts amount reduced
Seller(copy) → Credit Note → Buyer (original)

Cheque And Cheque Section
1. Cheques are a simple and secure payment method.
2. The buyer fills out the payment details on the check section. The detail to the check section is then used to be recorded in the Cash Book.
3. The seller also receives cheque and transfers into his bank account.

Buyer (cheque section) → Cheque → Seller (cheque)

Receipt/Copy Of Receipt
1. When a seller receives a payment from the buyer, the seller will send the receipt to the buyer as proof of receipt of payment.

Seller (copy) → Receipt → Buyer (original)

2. Receipts are usually provided in two copies:
(a) Original copy sent to the payer to be recorded in the Cash Payment Journal / Cash Book (credit).
(b) Copies of carbon/counterparts are retained by the seller for recording in the journal Cash Receipts / Cash Book (debit)

Account Statements
1. The Account Statements sent by the seller to the buyer.  Account Statements is a summary of the transactions that occurred between the seller and the buyer, usually for a month.

Seller → Account Statements → Buyer (original)

2. The  Account Statements also serves as a reminder to the buyer to settle the debt as well.
3. The buyer can check and compare the entries in his book with the item on the statement of account.

1. Office memos are usually used to record transactions that occur between business owners and their businesses. Memos serve as an internal document.
2. Typically, office memos are used to record:
(a) Money recruitment, merchandise, and assets by business owners.
(b) The admission of money and the owner’s personal assets into the business to increase its modal.
(c) Various things that can not be recorded in other First Notebook.

Cash Bills
1. This bill is used for cash transactions.
2. The seller will give a bill to the buyer who pays cash or check immediately.

Payment Voucher
1. The payment voucher records all types of payment by the business side either in cash or by check. For example, paying employees’ salaries, rental of premises, and other business expenses.
2. The payment voucher contains:
(a) Payment details
(b) The amount of the payment (and whether paid in cash or check)
(c) Recipient’s signature
(d) Signature of manager