Purpose of these documents:
- Purchase Order – A document that is given to the seller from the buyer, to purchase specific goods, this constitutes a contract. This is usually the first thing in the commercial buying process.
- Invoice – A bill for goods or services provided from the seller to the purchaser. This has the amount owed.
- Statement – A total (usually monthly) of all purchases and payments (summarized) between the seller and purchaser, with the total amount remaining on the statement.
- Remittance Advice – This helps the supplier to correctly identify and reconcile any payment received from the business.
- Credit Note – This is important for the business to keep, as it helps with returning goods to the supplier, or if the invoice is incorrect.
- Bank Deposit Slip – This form is completed when a deposit is made at the bank. The bank keeps the original, and stamps the duplicate which the business keeps.
- Cheque Requisition Form – This form allows authorisation for writing the cheque. This must contain the following information: Amount, Payee’s Details, Reason for Payment, Name of person completing the form, and the authorisation signature and name.
If a business buys goods on credit and then pays for them next month, this process will take place:
Purchase Requisition Order Created –> Purchase Order Sent –> Delivery Docket Received –> Tax Invoice Received –> Credit Notice Received –> Statement Received –> Cheque Requisition For Received –> Cheque Butt Sent.
If a business sells goods on credit and is receiving payment next month, this process will take place:
Purchase Order Sent –> Delivery Docket Copy Returned –> Tax Invoice Sent –> Credit Note Sent –> Statement Sent.
Here are some interesting links to useful resources:
The information required on a tax invoice is:
- the words “tax invoice” in a noticeable place
- the name and GST number of the supplier
- the name and address of the recipient of the supply
- the date the invoice was issued
- a description of the goods and/or services supplied
- the quantity or volume of the goods and/or services supplied..
It must also have either:
- the amount, excluding tax, charged for the supply
- the GST and the total amount payable for the supply, or
- a statement that GST is included in the final price if it has been.
The importance of IT professionals understanding business terminology and document flow:
There are many benefits as an IT professional to having a good knowledge of the business world. Not only will an understanding of business terminology make it easier for you to communicate and thrive in the business world, but it can help you to understand the business you are working with. It will give you a better understanding of how the business works and makes its decisions, therefore allowing you to programme software so it actually solves the problem the business has encountered. This knowledge of the business world will also keep the business owner happy, they will be more confident that you know what you are doing and talking about. Then on a more personal level, it will also help you to understand how you are getting paid and what you should be charging yourself out at. So all in all, having an understanding of the business world in the IT industry is pretty essential.