Documents form the basis of a business’s accounts. Keeping a record of transactions can also help a business track what its customers are buying and when, which helps it tailor future business to their needs.
The seller of goods and services sends some documents to the buyer. The buyer of goods and documents sends other documents to the seller.
Document
Letter of enquiry Quotation Order
Delivery docket Invoice Receipt
Statement
Sent by Buyer Seller Buyer Seller Seller Seller Seller
Received by Seller Buyer Seller Buyer Buyer Buyer Buyer
We will now look at each of these documents in more detail. LETTER OF ENQUIRY
Before placing an order for supplies, a business may contact a number of different sellers to find out what goods are available and how much they cost. The document sent out to the suppliers is called a letter of enquiry.
A letter of enquiry asks the seller the following questions about the terms of sale:
• Will the goods be available when they are needed? • How much will the goods cost? • Can the goods be bought on credit? • Are there discounts for bulk buying the goods (i.e. purchasing goods in large amounts)? • When will the goods be delivered and how much will delivery cost?
• How must the goods be paid for? For example, cash with order (CWO) or cash on delivery (COD).
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Terms of sale refers to the payment and delivery details that a buyer and a seller agree on during a transaction.
Cash with order (CWO) means the goods must be paid for when they are ordered. Cash on delivery (COD) means the goods must be paid for when they are delivered.
