1. Chapter 16 Financial source documents BSBCMN207A/03—Reconcile invoices for payment to creditors BSBCMN207A/04—Prepare invoices for debtors
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

2. Financial source documents
Contents
Financial source documents
Reconcile invoices (BSBCMN207A/03)
Prepare invoices (BSBCMN207A/04)
Summary
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

3. Financial source documents (BSBCMN207A)
Department/Section
Purchase requisition
Sales
Invoice
Delivery docket
Credit note
Purchasing
Purchase order
Inwards goods
Goods received
Accounts receivable
Statement
Receipt
Deposit forms
Accounts payable
Cheque, payment
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

4. Financial source documents (BSBCMN207A) cont.
Purchase requisition is raised by the individual or department requiring the goods
Purchase order is created by the purchasing dept. from a suitable supplier
The supplier prepares a tax invoice and a delivery docket which is sent to the purchaser
Inwards goods dept. of the purchaser checks the goods and forwards the invoice and delivery docket to their accounts payable dept.
At month’s end the supplier forwards a statement to purchaser’s accounts payable dept.
The invoice is checked against the statement and if approved pays the correct amount
The supplier forwards a receipt for the payment
The payment is banked by the supplier
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

5. Reconcile invoices (BSBCMN207A/03)
Organisational policy and procedures will vary from company to company, depending on the size of the market, nature of the industry and state of the economy; however, the use of computer packages like MYOB tends to standardise documentation
Australian Accounting and Auditing Standards impact upon the documentation of all firms
Australian Taxation Office (ATO) also dictates what records and documentation are mandatory for reporting purposes
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

6. Reconcile invoices (BSBCMN207A/03) cont.
Source documents details
Purchase requisitions must have:
Number of requisition
Order date
Delivery date
Department requiring goods
Name of the authorising person
Particulars of goods required
Special conditions (if applicable)
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

7. Reconcile invoices (BSBCMN207A/03) cont.
Purchase orders
Purchase order number
Name and address of buyer
Name and address of supplier
Full details of goods being ordered, including:
Type
Size
Quantity
Colour
Code number
Number of days before payment is required
Delivery instructions
Date by which goods are required
Means of transport
Signature of authorising person
Date of preparation
A statement indicating the quoted price, including GST
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

8. Reconcile invoices (BSBCMN207A/03) cont.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

9. Reconcile invoices (BSBCMN207A/03) cont.
Delivery documents
The delivery date
Name of the buyer
Name of the seller
Brief description of goods
Document number
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

10. Reconcile invoices (BSBCMN207A/03) cont.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

11. Reconcile invoices (BSBCMN207A/03) cont.
Names and addresses of buyers and sellers
Invoice number
Delivery date
Number of the purchase order
Transport details
Full details of goods being sold
Extra delivery instructions
Terms and conditions
Trade discount (if applicable)
Delivery charges (if applicable)
Final total or amount owing
GST calculation
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

12. Reconcile invoices (BSBCMN207A/03) cont.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

13. Reconcile invoices (BSBCMN207A/03) cont.
Rectifying errors
Correct addresses
Customer’s reference number
Quantity matches original purchase order and delivery docket
Price confirmed with quote and current price list
Arithmetic is checked
GST calculation checked
Date of invoice is after date of delivery
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

14. Reconcile invoices (BSBCMN207A/03) cont.
Creditors
A creditor is a supplier that has allowed you to purchase goods or services with the understanding that you will pay for them at a later date
Typically most creditors allow for payment within 30 days
Often penalties (interest) may accumulate if an account/invoice is not paid by the due date
The creditor’s statement must be reconciled against invoiced goods for that month
Statement reconciliation is often a time-consuming task and the creditor may need to be contacted several times before an agreement can be reached
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

15. Prepare invoices (BSBCMN207A/04)
Debtors
These are our customers to whom our business has sold goods or services and from whom payment will be forthcoming
Payment is normally expected within 30 days of the sale, or from the date of the statement if there are multiple transactions
Good debtors (customers) are an asset to the company
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

16. Prepare invoices (BSBCMN207A/04) cont.
GST—under Commonwealth Law suppliers must charge their customers the 10% tax due to the Federal Government
All businesses with a turnover of $ or more must register and apply for an Australian Business Number (ABN)
The ABN must be quoted when GST is forwarded to the Government
Exclusive pricing—the price is quoted without the GST added
Inclusive pricing—the price is quoted with the GST
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

17. Prepare invoices (BSBCMN207A/04) cont.
Making adjustments to documents
When a customer has returned goods for a refund
The wrong price has been charged
There is a problem with the customer’s ability to pay the invoice
The customer has paid early and is due for a discount
Under ATO regulations all source documents need to be kept and filed by businesses for a period of five years
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

18. Prepare invoices (BSBCMN207A/04) cont.
Statements
A statement is a record of all the transactions that have taken place between the buyer and the seller over a period of one month
It shows the balance outstanding at the end of the month and gives the status of any amounts outstanding from previous months
It is the duty of accounts payable staff to balance the statement against their own records, including:
payments made
adjustments (credit or debit notes)
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

19. Prepare invoices (BSBCMN207A/04) cont.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman

20. Summary
Purchase requisitions are prepared by the department that wants the goods or services.
A purchase order is prepared by the purchasing department.
The supplier prepares a delivery docket, which is sent with the goods and signed by the purchaser.
An invoice, inclusive or exclusive of GST, is also prepared and sent to the purchaser.
A statement is sent at the end of the month to the buyer.
After reconciliation is complete, the buyer pays the seller for the goods or service. Normal terms are 30 days.
Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Office Skills: A Practical Approach 4e by Horsfall and Turner
Slides prepared by David Plowman