f you handle accounting, you must have noted that some documents always crop up in your
reports. When accounting, we record financial transactions, analyze them, and make reports.
The importance of accounting to a business cannot be overemphasized more, especially as
oversight agencies and tax authorities need these financial statements for various reasons.
Knowing what documents to use is just one part of the bigger picture. Here we compile a list of
the most frequently used documents accounting.
1. Cash Memo
Businesses use cash memos as source documents. It is here that we record all sales and purchase
transactions. It is one of the most recurrent accounting documents, which a business gives when
it makes cash sales or receives in case of a cash purchase.
The cash memo contains details such as the number of sales, price of goods, applicable discount,
and sales tax. Transactions in the cash memo go into the book of accounts and the auditor will
always look to cross-reference the cash book and the cash vouchers.
2. Invoice
An invoice is also called a bill. Business must record all their credit sales or credit purchases in
this document. For example, when a firm makes sales on credit, it prepares a sales invoice. It
details the transaction in terms of the number of goods sold, the price per item, and the total
amount sold. The same applies to purchases.
Invoices usually are written in duplicate, with the main (original) copy given to the buyer while
the seller keeps the duplicate.
An invoice becomes a bill when the buyer or purchasing entity receives the original invoice
copy.
3. Receipt
Businesses use the receipt as proof of payment for goods and services. It is a source document
that a seller prepares on account of receiving cash from a second party.
Also prepared in duplicate, the original copy goes to the person giving out cash or paying. The
seller keeps the duplicate as a record of the transaction and will show payment details including
name, date, the total amount paid, and type of payment (cash/cheque).
4. Pay-in-Slip
The pay-in-slip is a proof of transaction document received from a bank for depositing money
into a bank account.
The process involves filling up a form at the bank, with details of the depositor, date of
transaction, and amount deposited.
Pay-in-slip must be signed by the bank clerk with the official bank stamp on the counterfoil.
Bookkeepers use the pay-in-slip counterfoil as a source document for recording the transaction.
5. Cheque
The cheque is one of the most used financial accounting documents. The document is used for
financial transactions and is payable once presented to a specified banker. The cheque is an
unconditional order in which an entity signed signs directing the banker to pay a certain sum of
money. The payee is the person whose details appear on the instrument.
Cheques can be “crossed” which means the cheque is payable to the account of the payee only.
6. Debit Note
We use the debit note as an evidence document. The note is sent to an individual or business
against which we have the debit. Businesses draw debit notes against entities from which they
anticipate recovering certain amounts of money. For example, if you draw a debit note to a
supplier, you expect them to return defective or damaged goods.
Businesses also use a debit note in cases where there is an overpayment. You must indicate all
the necessary details in a debit note, including the date and amount debited.
7. Credit Note
Businesses use a credit note to show that they have credited a given party as indicated on the
document. The document is written, for example, to a purchaser to show that the business has
credited that transaction in their books.
You can prepare a credit note in case you make a payment that turns out to be less than it should
have been.
Details are like in a debit note. However, easily distinguish between the two by the red ink used
to write the credit note.
8. Voucher
A voucher is a business document that records what type of transaction is to be recorded in
financial books. Vouchers are prepared using source documents and identify transactions as debit
and credit.
There are two types of vouchers:


Cash Voucher
Non Cash Voucher
Cash vouchers include receipt and cheque payments while non-cash vouchers involve the debit
note and credit note.
9. Remittance Advice
We use the Remittance Advice to detail payments sent to a supplier, including whether it’s an
invoice or offset credit note. And if the customer is paying with a check, the remittance advice
will be sent along with the check. In that regard, remittance advice is different from a payment
receipt, since it originates from the customer.
10. Account statement
This is a document sent out by a supplier to a customer listing the transactions on the customer’s
account, including all invoices and credit notes issued and all payments received from the client.
11. Quotes
When sourcing for goods or services, a business will often seek price quotations from different
suppliers. The suppliers will send their quotes, in which they describe their products or services,
pricing, and delivery terms.
Once the business checks the quotes and selects the best quote, the suppliers will receive a
purchase order, based on their quote. In turn, they will supply the goods or services, and then
send a purchase order.
During audits of accounts, auditors and tax agents often ask for supplier quotes, to look for signs
of fraud. Quotes as source documents are therefore important to the accounting department.
12. Orders
Order documents are sent by the business to a supplier. They bear the description of the products
or services, but may not include prices. That’s because a business may want to order supplies,
but may not have the updated price list.
However, they are important because the goods delivered or services provided must match the
specified requirements in the order documents. An order document can be as simple as an excel
page with a list of items, along with a short description.
13. Goods Received Note
As a business, when you receive goods ordered, you have to document the order when it arrives.
You do that using a received note, normally at the warehouse.
The goods received note indicates who delivered the goods, who received them, the superficial
condition of the goods, and their quantity. The goods received can be used to track inventory,
and therefore streamline accounting work.
14. Material Received Note
For manufacturing businesses that receive materials from suppliers, they use a material received
note to keep track of their material inventory received. That note details the name of the supplier,
the name of the delivery person, what was received, its quantity, date, and inventory location.
It also includes the name of whoever received the goods into the warehouse, their signature, and
date. It may also indicate the condition of the received materials.
15. Goods Dispatch Note
When a supplier makes a delivery, the goods are accompanied by a goods dispatch note. That
document details what is being delivered, who delivered it, and who received it. Often the
receiver has to sign it, indicating they accepted the goods.
The goods dispatch note can be used to back up invoices, or claims of undelivered goods. In that
regard, it helps the accounting department do a follow-up on invoices and debts.
16. Sales Order
When a supplier receives a purchase order from a customer, they will create an internal sales
order. The sales order is then sent to the sales team, for the sales team to arrange for delivery of
goods.
A copy of the sales order is also sent to the warehouse, to help with inventory management. In
that regard, sales orders help the accounting team to coordinate with the sales team.
17. Purchase Order
A purchase order is a document that a buyer prepares and sends to a seller or supplier when they
want to purchase goods or services. This document usually contains a detailed order request for
the supplier to go through to ascertain if they can supply the requested goods. The company that
makes use of a purchase order provides a significant amount of control over how they spend their
money by creating a seamless and transparent method of requisition.
Once a purchase order is received by a supplier, it gives them the necessary information to
decide if they can fulfill what is required by the customer. As a result, this document
significantly reduces the chances of incorrect or incomplete fulfillment of orders.
18. Employee Time Sheet
Employee timesheet is an important accounting document that must be used by any serious
business that employs staff. This document allows a business to keep track of the amount of time
spent by staff working each day. The employee timesheet is typically a document, which
presents time logs in a tabular format, either physically or digitally. This document is critical in
ensuring that employees are accurately compensated for the work they do without short-changing
the business. Therefore, a well-managed employee timesheet ensures productivity and allows a
business to manage its finances efficiently and effectively.
19. Packing Slip
A typical packing slip may include shipment details such as stocking keeping number,
dimensions of the package, the weight of the package, and unit number. The information that is
included on a packing slip helps the accounting department to get the actual number of items that
have been shipped. Likewise, it ensures that the right shipment has been made. Once a shipment
has reached its destination, the recipient can easily compare the packing slip against the received
items to ensure the right items have been received.
20. Deposit Slip
A deposit slip is a document that is invaluable for the management and control of transactions
within a bank as it makes accounting easy. When an individual goes to deposit money in cash or
as a cheque into a bank, the teller usually hands them a deposit slip to fill. Information such as
account name, account number, amount of money in cash or as a cheque, and more must be
written when filling the deposit slip. Once the slip is filled and submitted, a receipt is presented
to the depositor and a deposit slip is filed away to facilitate recordkeeping.
Important tips for handling accounting documents
After knowing the most important accounting documents, a seller has to understand how to use
them to get the best results. Some of these documents act as proof of sales, and therefore, they
should be perfect when the controlling agencies come asking for them. Additionally, accounting
documents can be changed at any time, and so, a seller should know how to update them with the
required details. However, as long as one understands the accounting process and knows how to
meet local laws’ requirements, everything will be fine. The following tips can make the handling
of these documents easier.
Always keep an electronic copy of accounting documents
After preparing cash memos, receipts, and other documents in accounting, a seller should create
an electronic copy too. Nowadays, it is easy to manage electronic copies because they do away
with the clumsiness associated with hard copies. For instance, they can be retrieved with ease,
and they can be stored more safely.
They will help to clear the office of too many documents that may no longer be useful. However,
the most significant advantage of electronic copies is that they act as a backup for the rest of the
records. If the hard copy gets lost, it can be retrieved and printed. Therefore, these copies will
help to solve disputes in the absence of hard copies too.
Be thorough with financial accounting documents
The documents used in accounting require data from various sources, and it is used for specific
purposes. For example, cash memos are filed with data regarding the sold items. Because of that,
the seller has to ensure that all details are captured in the documents. It becomes even more
important when these documents are used as proof of sales.
In that case, the seller will be in a difficult spot if they do not thoroughly check the details. A
look at the accounting document list shows that each one needs to capture data for specific
purposes, and it is good to keep it in mind when using them.
Use a variety of business documents in accounting
The diversity of accounting documents is an indication that a seller should not rely on one
option. If one knows the importance of source documents in accounting, they would know that
using them in different forms can bring lots of benefits.
For example, when working with various types of cash memos, it will be easy to identify the one
that captures sales data best when there is a variety. When using a receipt as a source document,
you may want to know if there is a type that captures more details than the others.
Also, consider consulting a professional accountant when working with accounting documents.
An expert knows how to identify errors and inconsistencies, and they will help fix them to make
financial statements accurate. It is more important when doing it for tax compliance purposes.
In addition to that, accountants know what the authorities look for when they ask for financial
information, and so, they will help business owners to avoid fines and other penalties.
Conclusion
Accounting documents play a critical role in the handling of business transactions and the
preparation of financial statements like the income statement and balance sheet. They are also
needed for compliance and tax records. Businesses are now automating many of the accounting
processes, and the software a business chooses could be a great addition to keeping financial
records.