Every business buys goods and sells goods. A bakery buys flour from a wholesaler and sells bread to its customers. A clothing shop buys stock from a supplier and sells it on. Each transaction creates paperwork.
Each business document is a record of one step in a transaction between two businesses. The buyer and the seller exchange documents back and forth, from the first enquiry about the goods to the final payment. Together these documents form a paper trail for both businesses to keep in their records.
The Order of Business Documents Most transactions would follow a similar pattern to the one laid out below:
LETTER OF ENQUIRY Buyer ➔ Seller
QUOTATION Seller ➔ Buyer
ORDER Buyer ➔ Seller
DELIVERY DOCKET (sent with goods) Seller ➔ Buyer
INVOICE
Seller ➔ Buyer RECEIPT
Seller ➔ Buyer
1 2 3 4 5 6
We will look at the function of each document and the main elements each contains.
At the end of each month a business would also send a Statement of Account to buyers outlining the balance owed on their account. A credit note can also be sent at any point if any goods are faulty or missing from an order, which reduces the amount the buyer owes.