2 Order of financial docs Purchase orderdelivery noteGoods received noteInvoiceCredit noteStatement of accountRemittance advice slipChequereceipt
3 Purchase orderIf you place an order for a new office chair then a purchase order would need to be completedI.e. purchase orders are made out when one business orders from anotherPurchase orders need to be checked for accuracy
4 example Complete the purchase order with these details: you work for Mouse MattersYou order 200 sq metres of blue mouse cloth, 20 m of black mouse cloth and 50 m of 2mm vinyl sheetItem codes are MC03, MC04 and V07 respectivelyPrices are £5.50, £5.50 and £6.60 respectivelyOrdering from Universal Fabrics, 4-10 Dickenson St, Battersea, London, SW11 ORTOrder No is 2003/707Supplier No is 97Delivery is one week todayI will sign as purchasing officer!!
5 questions What happens if the following errors are present? The suppliers post code is wrongSuppliers name and address is wrongDescription of material is right but code is wrongPrice on the order is 2 less per item than stated in supplier’s price listThe form is not signed
6 Delivery noteProduced by suppliers of the goods and sent to the business customer with the goodsAfter goods arrive, a staff member checks them and signs two copies of the delivery noteOne is kept and one returned to the supplierA signed delivery note means that everything is in order and the invoice can be sentIf a large business uses its own specialist company to deliver goods the delivery note is known as an advice note
7 exampleYou must now complete the delivery note using the information from the purchase orderMake sure you copy the order no correctlyLikewise the customer no and addressAlso check item code and quantity
8 Goods received note Each time an order is unpacked and checked a goods received note is filled in as a double check (may be because in first instance the delivery note was signed by reception)records what was delivered, when and by whomNeeded by accounts to check details on invoiceIf there any differences or discrepancies the supplier is contacted immediately
9 exerciseIn groups of four discus the following and come to a group decision:What action would be taken if each of these occurred:Ten boxes of paper were crushed and damaged in transitPink paper ordered instead of whiteThe order stated 50 folders but 500 were deliveredOnly 15 ink cartridges were delivered instead of 20
10 invoiceSent form supplier to customer for payment for goods which have been deliveredPrices added together to give total amount owingVAT will be calculated and addedObviously need to be checked for errors
11 exampleCalculate the total invoice amount for mouse matters from universal fabrics given that VAT is 17.5%Fill in the blank invoice provided
12 Credit note Used if customer overcharged or if goods are faulty Also used if wrong goods sent or the wrong amount sentSometimes more may have been ordered than necessary. If the supplier agrees to take these back then a credit note can be used
13 Statement of accountStatements of account list or detail the transactions between two companiesUsually sent out each month to all customers who owe moneyThree columns – the debit column shows amounts owed by the customer, the credit column shows amounts paid by the customer, the running balance column is calculated after each transaction
14 Remittance advice slip Sent attached to the statement of accountDivided by a perforated line so can be detached and sent back with chequeObviously details should be checked on remittance advice with those on the statement of accountFinal details should be checked to tally with cheque written
15 chequeCheques are a convenient way of paying for large business transactionsAlso more secure than large amounts of cashComplete the blank cheque for the amount detailed on the statement of account for mouse matters i.e. for £Common mistakes include: date incorrect, not signed, difference between amount written in words and numbers, alteration on chequeMinor alterations an be initialled
16 receipt When cash is used a receipt will normally be issued Provides proof of purchase and allows for staff reimbursementAlso provides details of VAT paidTwo copies issued – one to customer, the other retained but the businessContains date, ref no, amount paid for each good, total and VAT added.
17 Computerised systems: advantages Quick – instant in most casesAutomaticFewer mistakesCan chase up unpaid bills more easilyNo docs to loseLinked to other systemsCan search customers easilyAccount nos allocated automaticallyMore secure?
18 Computerised systems: disadvantages Cost – can be expensiveInput of dataStaff trainingHardware/computer failureInput errors – can be difficult to spotCan be inflexible