1/21/2024 0 Comments Sales and purchase invoice![]() ![]() It is the link between the original order sent by the customer and the invoice generated by the supplier. Order No – this is the purchase order number.Here’s the invoice Emily generated and sent to Adam:Īs all invoices have to legally include certain information and use standard calculations, then understanding ‘an invoice’ is equally important for both generating sales invoices and checking purchase invoices. From the purchases side, the customer checks the invoice and pays it. ![]() ![]() Looking at it from the sales point of view, the business selling goods or services generates the invoice and sends it to the customer. Invoices are a key document in both sales and purchases. That depends on whether you’re buying or selling and businesses, of course, do both. What we must understand is which business generates each document and which business checks it. In any transaction, the purchase order, delivery note and invoice are used by both the customer and the supplier. The purchases process involves documentation which is both received from the supplier and generated by Adam’s business (he is Emily’s customer). The sales process involves documentation which is both received from the customer and generated by Emily’s business (she is the supplier). The table allows us to see the complete process and the paperwork involved. Let’s return to the example of Emily selling Adam some stationery and look at who generated which documents: This is why the one transaction gets separated into the two functions from a practical point of view. Both businesses will check paperwork, but the documents will differ depending on whether you’re the seller or buyer. Some of it’s generated in the seller’s business and some in the buyer’s business. Simply that, just as there’s only one transaction when something is bought/sold, there’s only one set of paperwork too, but it’s mixed up between the customer and supplier. We’re now going to look at the basic documentation used in buying and selling and transfer our knowledge about the nature of sales and purchases to paperwork. In part 1 of our sales and purchases series we looked at why sales and purchases are both part of the same process but are split into separate functions – half of a transaction takes place in the customer’s business and the rest in the supplier’s. 5 – Cash and credit transactions in double entry bookkeeping.4 – Sales and purchases in double entry bookkeeping.3 – Difference between cash and credit transactions.2 – Documentation behind buying and selling.The second article of our series on sales and purchases. ![]()
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