Commercial Documents and Payment Methods
Minutes
Minutes: A draft is written before a contract is finalized. It’s an annotated document outlining the main points that will be used in the final draft.
Invoice
Invoice: A document issued by the seller, and agreed upon by the buyer, detailing a transaction involving the sale of goods or services. Entrepreneurs and professionals are required to issue invoices for transactions carried out in the course of their activities. Invoices are typically created in duplicate, with both the buyer and seller retaining a copy.
Bill
The Bill: A document that justifies a payment made. The person receiving the payment issues it to the payer as proof of the transaction.
It has two parts: the receipt and the matrix. The receipt is delivered to the payer, and the matrix remains with the issuer. Both serve as proof of payment and contain:
- Receipt number
- Name of payer
- Amount paid (in letters and numbers on the receipt, and numbers on the matrix)
- A description of the reason for the payment
- Date and place of issuance
- Name and signature of the person receiving payment
Payment Methods
Payment: Payment for a sale can be made in two ways: cash or deferred. Cash offers immediate use of the funds, with the advantage of potential discounts. The disadvantage is the immediate outlay of money. Deferred financing allows for acquiring a product and paying in installments.
Methods of payment:
- Cash
- Credit card
- Bank transfer
- Check
- Promissory note
- Bill of exchange
- Standard receipt
Check
Check: A payment document regulated by Law 19/1985. It must contain: the phrase “Pay to the order of”, the amount of money to be paid, the payer (necessarily a financial institution), the place of payment, the date of issuance, the place of issuance, and the issuer’s signature.
Types of Checks
- Bearer Check: Does not indicate a specific person for collection; anyone presenting the document can withdraw the money.
- Crossed Check: Crossed diagonally by two parallel lines. This indicates that it must be deposited into an account and cannot be cashed over the counter.
- Certified Check: Issued by a bank that guarantees payment of the indicated amount within a given period. It certifies that the funds are available.
- Blank Check: An incomplete document. It carries many risks, especially if delivered signed, as claims may be difficult to make later.
- Traveler’s Check: Substitutes for cash when traveling abroad. Issued by financial institutions.
Endorsement and Aval
The Endorsement: The act of transferring a check to another person. The person transmitting the check is the endorser, and the receiver is the endorsee. This is done by completing the back of the check with the phrase “Pay to” (for this check to pay yourself) along with the endorser’s signature.
Aval: The act by which a third party guarantees payment of a check. The guarantor is jointly and severally liable for payment if the obligor defaults. It may be complete or partial.
Promissory Note
Promissory Notes: Also governed by Law 19/1985. A written document outlining the commitment of a person (the signer) to make a payment to another individual (the beneficiary) of an established amount in a particular place at a specified maturity date.