A business document is a form that provides details of the transaction and the evidence

of that transaction has taken place.

Need and Importance of Documents in Trade:

 It provides a written record of transactions.
 It forms the basis of recording entries in the accounting records.
 It helps the government to charge tax
 It provides information to the users of accounting.
 It helps the government to publish wide range of statistical information.

Letter of Enquiry:
 It is sent by the buyer to the seller to find out the information about the goods
required such as:
o The availability of goods
o Price of goods
o Terms of payment
o Time to be taken for delivery of goods
 Enquiry may be a letter or standard printed form.
 Retailer would send letter of enquiry to a number of suppliers.

B.Buyer & co
(buyers full address)
Our ref. WL/PG/35 Date:

To
S.Sellers & co.

Dear sirs,
We would be pleased to receive at your earliest
convenience Your latest quotation for the supply of the
following items.
Items Qty
National washing machine 50
Usha ceiling fan 200
Hemilton water cooler 50
Premier cooker 100
Samsung TV 30

Yours faithfully,
For B. Buyer & co.
Sd/-
[proprietor]

Quotation (Catalogue and Pricelist):

  As a reply to the letter of enquiry the sellers will send quotations which say what
they can offer.
 Quotation informs the buyer about:
o The price at which he can supply the goods.
o The terms on which he can supply them (including the discount available)
o The cost of carriage of goods
o The time needed for delivery etc
 Instead of sending a quotation many firms may send a catalogue giving
information of the various types of goods offered for sale and a price list.

S.Sellers & co. No.1342

(Sellers full address)

Vat reg. 987654321 Date:

Sir,
With ref. to your letter no. WL/PG/35, we hereby foreward our
price and the terms and conditions.
Sl.No Item/Description Unit Price
1 National washing machine Rp.150000
2 Usha ceiling fan Rp. 200000
3 Hemilton water cooler Rp. 800000
4 Premier cooker Rp. 600000
5 Samsung TV Rp. 2000000
Price exclusive of VAT
Terms: 7days 5%;28 days 2 ½%;45 days net.
Delivery: 10 days
Delivery at your premises.
Freight paid by the buyer.
For acceptance within 1 month.
Signed
Director

Order
 After comparing all the quotations, the buyer will choose the best supplier who
offers him more benefits.
 When he chose the seller, the buyer would prepare and send an order which
advices the seller of:
- the details of the goods that are required
- place to be delivered
- date of delivery required
- agreed price etc.
 B.Buyer & co
(buyers full address)
Order no. 0031

TO: S.Sellers & co.

Date:

Items Catalogue Number Quantity Unit price

Rp
National washing machine K476 Fifty 1500000
Usha ceiling fan T241 Two hundred 200000
Hemilton water cooler C106 Fifty 800000
Premier cooker C193 One hundred 600000
Samsung TV T109 Thirty 2000000

Delivery: April 10,2007 to this address

Signed:
Proprietor

Advice note:
 This is a statement sent by the supplier to the customer to advice him that the
goods have been dispatched and will soon be delivered.
 It contains the details of the goods sent and the date of dispatching.
 After getting advice note the buyer can expect the delivery of goods shortly and
make arrangements to handle the goods.
 If the goods do not arrive within a reasonable period the buyer can make
enquiries with the carrier.

An advice note is a document that confirms the receipt and dispatched of customer order. The document is
sent by a supplier to a customer to inform him that the goods ordered has been dispatched.

S.Sellers & co.

 (Sellers full address)

Vat reg. 987654321 Date:

Sirs,
We have today dispatched the goods to you by road,
carriage forward, as per your order no. 0031 of
20/03/2007 the following items
Sl.No Item/Description Quantity
1 National washing machine 50
2 Usha ceiling fan 200
3 Hemilton water cooler 50
4 Premier cooker 100
5 Samsung TV 30
Yours faithfully,
Signed
Director

Delivery note:
 It is send by the seller to the buyer along with the goods so that the buyer can
check the goods delivered.
 The buyer will sign a copy of the delivery note and return it as a proof that he
has received the goods in good condition.
 It is usually sent when the seller uses his own vehicle for delivery of goods.

S.Sellers & co. No.3427

(sellers full address)

Vat reg. 987654321 Date:

Your order No.7631dated ……..

Please acknowledge receipt of the following items in good order.

Sl.No Item/Description Qty Unit Price

1 National washing machine 50 Rp.1500000
2 Usha ceiling fan 200 Rp.200000
3 Hemilton water cooler 50 Rp.800000
4 Premier cooker 100 Rp.600000
5 Samsung TV 30 Rp.2000000
Received goods in order
Signed
______________
(Buyer) Director

Consignment note:
  This is used when the supplier (seller) uses transport other than his own vehicle
to deliver the goods.
 This note is an instruction to the transport company to accept the goods and
deliver them to the customer.

INVOICE
 it is one of the most important and well known trading documents.
 it is a bill sent by the seller to the buyer after each sale on credit
 This is an advice to the buyer how much he owes to the sellers.
 It is used to prepare sales and purchase journals.
 The invoice contains:
- The invoice number
- name and address of the seller and buyer
- The quantity and description of goods, the trade discount allowed and the total
amount payable.
- the terms of payment
E&OE: - Many firms have the letter E&OE printed on their invoice.
This is an abbreviation for Errors and Omission Excepted.
This means that any omission or error found out later would be rectified.
This safeguards any clerical error that might have occurred while preparing the
invoice.

Invoice Seller &co

(Sellers full address)

Vat reg. 987654321 Date:

To:

Your order No.7631dated 20/03/07

Quantity Description Unit Total VAT Total

Price
Rp (000) Rp (000) Rp (000) Rp (000)

50 National washing machine 1500 75000 1000 76000

200 Usha ceiling fan 200 40000 1500 41500

50 Hemilton water cooler 800 40000 1200 41200

100 Premier cooker 600 60000 1400 61400

30 Samsung TV 2000 600000 10000 610000

Invoice total 830100

Terms: 7days 5%; 28 days 2 ½%; 45 days net.
Sd/-
E&OE Director

Differences between Cash discount and Trade discount:

Cash Discount Trade Discount
 1. Cash discount is given to 1. Trade discount is given to
encourage prompt payment. encourage bulk purchases.
2. This is a deduction from the 2. This is a deduction from the
invoice price of the goods list price of the goods
purchased on credit purchased.
3. The rate of cash discount 3 The rate of trade discount
depends upon the period of depends upon the quantity
credit allowed. purchased
4 The buyer will not get cash 4. The buyer is entitled to get the
discount if he doesn’t pay discount even if he fails to pay
within the given period within the given period.
5 It is treated as an expense in 5. This does not appear in ledger
ledger accounts. accounts
Credit note:
 Credit note is a document send by the seller to the buyer which shows that the
invoice value has been reduced due to some specified reasons.
 It is usually printed in red.
Reasons for sending a Credit Note:
 The price charged in the invoice is too high.
 Some of the goods send by the seller may be faulty and the buyer returns the
damaged goods.
 The buyer may return the empty containers for which the seller has already
charged in the invoice.
 The credit note contains the reasons for the credit note why it is issued. Then the
details of the item involved and price or value.
 The reference number of document involved in the sales or supply.

Credit Note
(Sellers Name $ full address)

Vat reg. 987654321 Date:

Credit: B.Buyer & co

Details Amount VAT Total

5 damaged Hamilton Water 400000 120 412000
cooler @ Rp 800/-

Signed
Director

Cheque and Receipt:

 Cheque is sent by the buyer to the seller for the amount payable as stated in the
invoice.
 Receipt is a proof of money received from the buyer.
 When a payment is made by cheque, it is not compulsory to issue a receipt,
since the cheque serves as a proof of payment.

Statement of Account:
 Statement of account is a summary of all transactions that have taken place
between a buyer and seller for a particular period.
 It also shows the balance that the buyer has to pay.
 It is request and a reminder to the buyer to make the payment to the seller.
 This enables the buyer to check his books of accounts and notify the seller if
there is any difference.

Statement of Account
(Sellers Name & full address)

Vat reg. 987654321 Issued:

B.Buyer & co

Date Details Debit(Rp) Credit (Rp) Balance(Rp)

01/04/2007 Balance b/f 20,000.000
04/04/2007 Cheque 20078 19,500.000 500.000
04/04/2007 Discount 500.000
08/04/2007 Invoice 43011 830,100.000 830,100.000
18/04/2007 Credit Note 4120.000 825,980.000
25/04/2007 Cheque 20185 800,000 25,980
25/04/2007 Discount 20,000. 5.980

Signed

Director