About business Documents that are required for any of the Business organisations

1. BUSINESS
DOCUMENTS

2. INTRODUCTION
Documents:
A document is a paper written or typed content which includes letters, reports, files, thesis, legal
documents and other important notes.
Documentation:
The process of preparing and maintaining a document is known as documentation
Business Document:
It refers to all the files, documents, records or company papers which is related to business.
In general business documents are all the documents that pertain to the activities that take
place in business firm.

3. Module 1: Documents and Transactions
A. 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, bill or tab is a commercial document issued by a seller to a buyer relating to a
sale transaction and indicating the products, quantities, and agreed-upon prices for products
or services the seller had provided the buyer.

4. A. Invoice
Payment terms are usually stated on the invoice. These may specify that the buyer has a
maximum number of days to pay and is sometimes offered a discount if paid before the due
date. The buyer could have already paid for the products or services listed on the invoice. To
avoid confusion and consequent unnecessary communications from buyer to seller, some
sellers clearly state in large and capital letters on an invoice whether it has already been
paid.
From a seller's point of view, an invoice is a sales invoice. From a buyer's point of view, an
invoice is a purchase invoice. The document indicates the buyer and seller, but the
term invoice indicates money is owed or owing.

5. B. Preparation of an Invoice
The following bits of information should be contained in the Invoice:
Information Required Explanation
◦ The details of the Business issuing Invoice Name of Business, Address, Telephone, Email etc
◦ GST Registration If the Business is GST Registered, Their unique
GST Registration number should be added
◦ Date of the Invoice The Invoice date and the supply dates are to be
mentioned
◦ Customer’s name and Address
◦ Invoice Number This must be unique and follow on from the last
invoice
◦ Account and your reference The Account is the businesses’ reference of their
customer. Your Ref. relates to the purchase order
◦ A clear description of each type of goods The unit price, quantity, rate of GST, rate of
discount, description of goods/services
◦ Net Price, GST, total amount including GST Net price of the goods, GST added, and the total
amount payable by the customer
◦ Terms and Conditions if any

6. C. Quotation
A quote (also called quotation, sales quote, price quote) is a document that provides an exact
price for a job. This is a fixed price that breaks down the full cost of the project, identifying the
timeline, scope, and other details needed to invoice later down the road.
Formal quotes are always in writing, and should include the following:
•Accurate pricing for materials, labor costs, taxes, and any applicable discounts
•Company branding and logo
•Company name and contact information
•A professional greeting thanking the customer for their time
•Line items of products/services requested
•Additional options to inform the customer of relevant offerings

7. D. Difference between Quotation and Invoice
The main difference between a quotation and an invoice is when they are
delivered and what information each details. A price quote is issued
before the delivery of goods, services, or before a project starts, and
details the projected costs. An invoice is issued after the delivery of
goods, services or after a project is completed and details all accrued
costs.

8. E. Receipts
A receipt is a written acknowledgment that something of value has been
transferred from one party to another.
A receipt is a document issued from a business to a customer after the
customer has paid for items or services. It acts as a proof of payment for both
your business and the customer.
A receipt is a piece of paper or electronic document confirming that the
seller received money from the purchaser.
It is an acknowledgment from the vendor to the buyer that the vendor has
received payment for a good(s) or service.

9. F. Difference between Invoice and Receipt
Invoices and receipts have different purposes as they’re issued at different stages of the sales
process.
- Invoices are issued prior to the customer sending the payment, whereas a receipt is issued
after the payment has been received.
- The invoice acts as a request for payment, and the receipt acts as a proof of payment.
This also means each document requires different information.
- The invoice should include a detailed breakdown of the products and services, whereas the
payment receipt only needs to show the amount paid and any balance due.
- Both documents should be clearly labelled as “Invoice” or “Receipt”.

11. G. Contents of the Receipt
Typically a receipt will contain the following
• The date and time of the purchase
• The number of items purchased and price totals
• The name and location of the business the items have been bought from
• Any Tax charged
• Method of payment
• Returns policy.

12. H. Voucher
According to Arthur W Holmes, ‘A Voucher is a documentary evidence in support of a
transaction’.
A voucher is a certificate or document that either allows you to purchase
something or proves that you paid for something.
Payment voucher- A payment voucher is used to keep a record of payments made in
cash or through the bank. They are of two types:
1. Cash payment voucher- It contains information about cash payments.
2. Bank payment voucher- It contains information about payments made by the bank.

13. I. Delivery Challan
A Delivery Challan is a formal document that is created in situations where goods
are being transported from one place to another which may or may not result in
sales. It is sent along with the shipped goods. It includes the details of the items shipped, quantity, buyer,
and delivery address.
Example: Transfer of goods from the Head Office to its branches. Delivery Challans are
sent along with the shipment of goods.