PAY RECORDING FINANCIAL TRANSACTIONS

CONCLUSION

In this chapter you reviewed a variety of documents used by a business as evidence of transactions. You will appreciate that they differ depending on their purpose and are often issued in order to indicate different stages of, for example, the sale or purchase of goods andlor services as indicated below.

DOCUMENT FLOW

Purchaser
  • Enquiry
  • Purchase order
  • Goods received note - internal document only (produced and retained by the purchaser when goods actually received)
  • If any goods-damaged, etc. goods returns note
  • Statement and remittance advice
  • Payment with remittance advice
Supplier
  • Acknowledgement, catalogue, price list
  • Confirmation of receipt of order
  • Advice note/delivery note/despatch note
  • Invoice
  • Credit note

Documents, particularly associated with making payments, must be properly authorised. Generally this takes the form of the signature of an authorised person. Documents are used throughout a business to record transactions and the financial implications of those transactions.

Key documents used in recording financial transactions are invoices, credit notes, receipts and petty cash vouchers. Statements and payslips are useful summaries which can be used as a check of transactions.

Document Flow: Purchaser vs. SupplierPurchaserSupplierEnquiryGoods Received Note(Internal Document Only)Goods Returns Note(If Goods Damaged/Wrong)Statement andRemittance AdvicePayment withRemittance AdviceAcknowledgement,Catalogue, Price ListCredit NoteLegend:Initial RequestStandard DocumentInternal DocumentReturns Document (Purchaser)Returns Document (Supplier)Payment
PurchaserSupplier
Enquiry---------------------→.
.←---------------------Acknowledgement, catalogue, price list
Purchase order---------------------→.
.←---------------------Confirmation of receipt of order
.←---------------------Advice note / delivery note / despatch note
Good received note - internal document only (Produced and retained by the purchaser when goods actually received).
.←---------------------Invoice
If any goods - damaged, etc - goods returns note---------------------→.
.←---------------------Credit note
.←---------------------Statement and remittance advice
Payment with remittance advice---------------------→.