Guide to Commercial Documents: Bills, Notes, and More
Bill
A bill, invoice, or commercial invoice is a document reflecting a sales transaction. It includes details about the product or service, date, amount payable, consignor and consignee information, unit and total prices, discounts, and taxes.
Features
- Reflects the purchase and sale of merchandise or transfer of ownership.
- Purpose is trading goods or property other than money.
- Goods should be free of any charge or lien, except for the title.
- Buyer’s signature acknowledges receipt and satisfaction with the goods.
- Upon compliance, the title can be transferred, and the remaining balance is considered credit.
Sales Note
A sales note details goods sold by a seller to a buyer, including quantity, price, delivery date, payment terms, and other operational details. Once accepted by the seller, it becomes a bill of sale, obligating the seller to deliver and the buyer to receive the goods. This document is binding for both parties. It is issued in duplicate and does not create accounts.
Chambers Guide
These documents are required when billing is postponed or goods are being moved for sale. They must include:
- Full names of the service provider and receiver.
- Details of the goods being moved (units, weight, volume, name, characteristics, and unit value).
- For tangible furniture sold via agents, brokers, or auctioneers, a unit price estimated at real value is mandatory.
- VAT can be added but must be clearly indicated.
- For non-sales transfers, the unit value can be omitted with a clear explanation (e.g., transfer of goods for distribution between warehouses).
Debit Note
A debit note informs a client of a debit to their account. This increases the debt and can be due to billing errors, late payment interest, etc. Examples include:
- Banks charging commission or fees on deposited checks.
- Shops charging freight for shipping or debiting interest and fees on documents.
Reasons for issuing a debit note include errors in revenue, interest, freight expenses, and bank expenses. A debit note always increases the buyer’s balance and is a registrable document.
Purchase Order
A purchase order is a written request to a supplier for specific items at an agreed-upon price. It specifies payment and delivery terms and authorizes the supplier to deliver items and invoice. All company purchases require purchase orders, which are serially listed for control. A purchase order typically includes:
- Original sent to the supplier, then to accounting for accounts payable.
- A copy goes to the purchasing department.
Credit Note
A credit note informs a client of a credit to their account. Reasons include:
- Breakage of goods sold.
- Price cuts, rebates, or discounts.
- Correcting billing errors.
A credit note always decreases the buyer’s balance and is a registrable document.