BUSINESS DOCUMENTS
Year 9 BUSINESS
FINANCIAL DOCUMENTS
 The documentation prepared when conducting business
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includes:
Purchase orders
Tax invoices
Delivery notes
Adjustment notes
Cheques
Receipts
ERRORS
 Any errors made in completing such forms should be neatly
crossed out, corrected and initialled on manually prepared
forms.
FLOW OF DOCUMENTS BETWEEN
BUYER AND SELLER
Buyer sends
purchase order
Seller sends
buyer a receipt
Seller
Receives
purchase order
Buyer sends
seller a cheque
and remittance
advice
Seller sends
delivery note;
invoice and
goods
If goods are
damaged,
seller sends
adjustment
note to buyer
PURCHASE ORDERS
 Orders for goods and services can be placed by telephone or
by faxing or mailing a written purchase order.
 Orders should be signed by an authorised person to provide
greater stock control and help eliminate the over or under
ordering of stock.
TAX INVOICE
 A tax invoice is a bill provided to customers indicating goods
/ services purchased and the amount owing.
 The tax invoice accompanies the goods being delivered to the
purchaser.
Terms
Meaning
N/7
Net 7 days – the amount owing must be paid within 7 days
2/7
Two per cent discount can be deducted from the total
amount owing if received within seven days
N/30
Net 30 days – the amount owing must be paid within 30
days
2/7;
N/30
Two per cent discount can be deducted from the total
amount owing if received within seven days –
OTHERWISE the total bill (without discount) must be
paid in full with 30 days.
DELIVERY NOTE
 Delivery notes, also known as delivery slips, delivery dockets
or packing slips are prepared when goods are ready to be
despatched to the purchaser.
 The supplier requires the purchaser sign the delivery notes to
acknowledge that the goods have been received in good
condition.
 The purchaser should carefully check that the order is
correct and that the goods are indeed in good condition
before formally accepting delivery of items.
ADJUSTMENT NOTE
 There are many reasons businesses seek adjustment notes –
damaged product; incorrect size; wrong colour; overcharge.
 Dissatisfied buyers can either return the goods and be
credited for the total amount owing on those items, or retain
the goods but seek a reduction in the amount owing to the
supplier.
 In both circumstances, an adjustment note is prepared by the
seller.
CHEQUES
 A cheque must be signed by an authorised person, allows money to be
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transferred from one party to another.
It instructs the financial institution to withdraw money from the
business’s account to pay a stipulated person / organisation.
There are three parties to a cheque:
The drawer – the person or business from whose account the money is
withdrawn
The drawee – the financial institution upon which the cheque is drawn
and whose name is preprinted on every cheque
The payee – the person or business who is being paid
Cheques are usually divided into two sections: the cheque butt and the
cheque form. The cheque butt must always be completed first to ensure
that correct payment details are recorded and to avoid making errors on
the cheque form.
 The two most common types of cheques are open and
crossed.
 An open cheque instructs the drawee to pay anyone who
presents the cheque for payment. Open cheques should only
be used to withdraw cash from the business’s account for
specific purposes.
 A crossed cheque offers greater security because once the
cheque has been crossed; it must be banked into an account.
RECEIPT
 When a debtor forwards a cheque in payment of the amount
owing as per the tax invoice, the creditor will forward a
receipt to the debtor if requested.
BANK RECONCILIATION
 Account for differences between the cash book and bank
statement balances.
 When the business receives a bank statement, it checks the
CASH book against the items listed on the bank statement.
 Any discrepancies, such as errors, or omissions, are
identified.
 The aim is for the Cash book to balance with the Bank
statement.
Differences between records
Bank Statement
Cash Books
( Cash Receipts Journal;
Cash Payments Journal; &
Cash at Bank)
Interest paid
Cheques (un presented – issued by business
BUT not yet taken to the bank by the
recipient)
Bank fees and government charges
Cheques banked by the business but declined
by the bank (Dishonoured cheques)
Deposits paid directly into bank account
(Bpay, Internet Banking or merchant
settlements)
Deposits banked by the business that have
not yet appeared on the bank statement
(deposits not yet credited)
Periodical Payments (loan repayments)
Errors made by both parties (incorrect
recording of figures)
Deposits from sales (EFTPOS)
Errors made by both parties (incorrect
recording of figures)