JC Business Docs Work in Progress
Help!
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| Buying on credit means... | buy now, pay later
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| An individual’s or a business’ credit rating may be checked by: | Looking up the Stubbs gazette, Contacting other business’ who have dealt with them
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| Treatment of orders by the seller | Date-stamp the order, Get the products ready for delivery, Send order to the office for preparation of delivery docket and invoice, File a copy of the order
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| Treatment of incoming delivery dockets: | Check it against incoming the order to make sure you are receiving what you ordered, File it away and check it against the invoice when it arrives
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| Treatment of outgoing delivery dockets: | Check the name and address of buyer are correct, Check the details are as per order, File a copy, Ensure the docket is signed by the buyer when good are received
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| Treatment of outgoing invoices | Compare prices with quote given, Check calculations for accuracy, Check address of customer, Write in Sales Day Book and post to debtors ledger, File a copy
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| Treatment of incoming invoices | Compare with order and delivery docket, Check accuracy of prices and calculations, Write in Purchases Day book and post to creditors ledger, File a copy
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| Invoice | This is a bill for the goods.
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| Credit Note | Sent from seller to buyer if they have been overcharged or have received faulty goods
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| Treatment of outgoing credit note | Check figures and dates for accuracy, Record in Sales Returns Day book, File a copy
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| Treatment of incoming credit note | Record in Purchases Returns Day book
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| Statement of Account | A document sent from the seller to the buyer at the end of a period of time, usually a month. It outline the transactions that took place between the seller and the buyer during that time
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| Treatment of outgoing Statements of Account | Check all transactions are included and correct, Check the name and address of the buyer, File a copy
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| Treatment of incoming Statements of Account | Compare with relevant documents, Compare with Creditors Ledger, Check all calculations, Pay seller amount due, File a copy
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| Receipt | When the seller receives payment it is usual to issue the buyer this.
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| Treatment of outgoing receipts | Check figures and dates for accuracy, Check the name and address are correct, Record in the Analysed Cash Book on debit side, Keep a copy
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| Procedure for dealing with complaints | Listen to the complaint, Investigate the complaint, Take the necessary action, Reply to the complaint, File a record of the complaint
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| Effective Purchasing Involves.... | Finding the best price, Making sure the goods will arrive on time, Making sure you order the correct amount. Not too much, and not too little, Choosing a reliable supplier and delivery company, Checking that goods delivered match the delivery docket
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| Why businesses sell on credit | To increase sales an profits. To compete with businesses who only sell for cash. To facilitate customers who require tome to pay for goods purchased. E.g builders
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| Bad Debts | Arise when the buyer does not pay the seller what they owe. They are written of as an expense by the seller
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| Terms and conditions | An agreement sent by the seller to the buyer that shows the price of the goods and the terms and conditions of sales. Includes items such as: date of delivery, cost of delivery and discount for cash sales.
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| VAT | Value Added Tax. Is a tax added on to the value of a good or service.
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| Cash discount | an extra discount given to the buyer if they pay promptly within the state period of time.
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| Ex-works | the buyer must pay for the transportation of the goods from the factory.
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| Cash with order (CWO) | payment for the goods is required at the time of ordering the goods.
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| Cash on delivery | Payment for the goods is required when the goods are delivered.
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| Trade discount | A reduction the selling price given when the buyer and seller are in the same area of business. It is deducted before VAT is added to the price.
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| Carriage paid | The seller will pay for the delivery of the goods to the buyer.
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| Errors and omissions excepted (E & EO) | Is often added to business documents. It is used to say that a price list, product description or other document may contain mistakes or may not include some details. However, it has no legal force.
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| Delivery Docket | Comes with the goods and is signed by the customer as proof of delivery
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| Order Form | You fill this in with the details of the goods you want to buy
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| Quotation | Sent to the buyer with details of the best prices they can offer, any discounts and the terms of sale.
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| VAT | Value Added Tax.
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| Credit Note | Issued by the seller if goods are returned or if they overcharged the customer.
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| Debit Note | Issued by the seller if they undercharged the customer.
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| Invoice | Shows what was delivered ;full details of cost and when it is to be paid.
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| Statement | This is sent at the end of each month. It lists all the invoices and credit notes for the month.
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| Receipt | Proof of payment for goods or services.
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| Credit Rating | The buyers ability to pay for goods purchased. This shows whether the customer has a good record of paying on time.
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| Payment | Paying for goods or services. This can be by cash, cheque, bank transfer, credit cards etc.
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| Bulk buying | Buying goods in large quantities.
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| Effective purchasing | Getting value for money by buying goods at the right price, quantity and quality.
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| Letter of enquiry | Sent to potential suppliers to check the best deals they can offer.
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| Terms of Sale | These can be payment terms, discount terms or transport terms.
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| Credit offered | The customer received the goods but pays for them later.
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| Trade discount | A reduction in price. The supplier may give this to other businesses, on goods that are obsolete or if they buy in bulk.
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| Carriage | Transport costs/ Delivery costs.
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| F.O.R | Free On Rail. Delivery is free to the nearest railway.
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| F.O.B | Free On board. Delivery is free to the nearest port.
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| Unit Price | The price per ONE product.
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