Guide to Business Documents and Payment Methods
Administrative Function
Primary Functions
These functions drive the company’s production process (production and marketing) and generate direct income.
Support Functions
These functions support primary functions and ensure the smooth operation of the company. Examples include procurement, administration, HR management, and finance.
Commercial Documentation
Introduction
The administrative function of a company involves issuing and filing various documents. Proper documentation facilitates management and business development.
Purchase Documents
Budget
A budget details the goods and services offered, along with their prices, payment terms, and clear identification of both the company and the client. VAT should be clearly stated if applicable. Budgets can be communicated by phone, email, fax, or in writing.
Order
An order confirms the client’s acceptance of a budget. It specifies the purchase or services requested and can be made via phone, fax, or email. It should include:
- Identification of both parties
- Document ID (order number and date)
- Goods identification (item code, units, description, unit price, total price)
- Purchase conditions (delivery time, place, method, payment method)
- Buyer’s signature
Three copies are typically created: one for the seller, one for the buyer, and one for the sales department.
Contract
A contract is a legally binding agreement between two or more parties. At the enterprise level, contracts are typically in writing. Types of contracts include:
- Buy-Sell Agreement: Specifies the conditions of a purchase, including parties involved, item, price, and payment terms.
- Service Contract: Outlines services provided by a company in exchange for a fee.
- Supply Contract: Covers utilities like electricity, water, telephone, and gas.
- Insurance Contract: Protects against business risks. The policy document outlines the terms, and the premium is the payment amount.
Packing Slip
If payment is due upon receipt, the carrier provides a receipt to the buyer upon delivery.
Invoice
An invoice is a legal document for goods or services. It must include:
- Buyer and seller information
- Invoice data (number, location, date, client reference)
- Description of goods/services (quantity, unit price, total amount)
- Discounts (rate and amount)
- Taxable amount (total amount less discounts)
- Value Added Tax (VAT)
- Total bill (taxable income + VAT + additional expenses like transport and insurance)
Other Documents
- Price List: Clearly describes products, unit prices, and validity periods.
- Expense Report: Details buyer-paid expenses related to the purchase, such as transport, insurance, and packaging.
- Bill of Lading: Serves as both a contract and invoice for transport services.
Payment Documents and Methods
- Cash
- Check: A document allowing the seller to collect funds from a bank.
- Bank Transfer: Electronic transfer of funds, potentially with fees for interbank transfers.
- Card: Payment via debit or credit card.
- Debit Receipts: Authorization for the bank to pay the seller.
- Installment Payments: Deferred payment with added interest. Common documents include bills of exchange and promissory notes.
Receipt
Proof of payment issued by the vendor. Receipts often come in books with two parts: the receipt given to the buyer and the parent copy kept by the vendor for record-keeping.
Check
A bank document authorizing payment to a customer. Types of checks include:
- Certified Check: Bank-guaranteed authenticity with funds secured.
- Crossed Check: Payable only to the beneficiary’s account.
- Personal Check: Identifies the payee by name.
- Bearer Check: Payable to anyone.
Compulsory information includes issuing bank, account number, amount, payee, place, date, and signature. Checks are typically valid for 15 days.
Bill of Exchange
A document where the drawer orders the drawee to pay a sum to the holder on a specific date. Key parties include:
- Drawer: The selling company.
- Drawee: The payer.
- Holder: The beneficiary.
- Guarantor: Guarantees payment.
- Endorser: Transfers the bill.
- Endorsee: Receives the endorsed bill.
Legal aspects include acceptance, aval (guarantee), endorsement, discount (early cashing), and protest (non-payment).
Promissory Note
A document where the signer promises to pay a sum to the recipient. Unlike a bill of exchange, it’s an unconditional promise and may include security interest.