At the end of this unit I will:

2. Learning Intentions At the end of this unit I will: • Know about relevant business documents when buying and selling • Understand about business documents • Value the importance of recording information

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4. BEFORE WE BEGIN #04AFEF Do this exercise individually or in pairs. Tick whether you agree or disagree with the statements. Revisit it after the unit to see if you have changed your mind about any of them.

5. ‘3Ts’ = Turn, Think, Talk • If you owned a business, what areas might you need to keep track of? • How would you do this? Wonderful Worthwhile Websites www.sageone.ie www.revenue.ie www.thinkbusiness.ie

6. Introduction to Business Documents Business documents contain important information that is key to creating an organisation’s accounts. Business documents are an important paper trail. • They trace all transactions, from initial enquiry to final payment • They provide figures for accounts • They contain information on terms and conditions • Revenue and other financial enterprises may need to see them • Specific documents can be referenced if a dispute arises 6

7. Important Business Documents • Letter of Enquiry • Quotation • Receipt • Payment • Order • Delivery Docket • Statement of Account • Credit/Debit Note • Invoice 7

8. Summary of Business Documents 8

9. WORKING WITH OTHERS #04AFEF • Name the documents sent from the buyer to the seller. • Name the documents sent from the seller to the buyer. • Which documents might be the most important? Why? Page 305

10. Letter/Email of Enquiry A letter of enquiry, a phone call or email is sent to several suppliers enquiring about prices and terms. You are enquiring: Buyer of the goods sends this document to the seller. • If the goods are available • What discounts are available? • What are the terms and conditions? • How much credit you will receive? • How long before you receive the goods? 10

11. Example 1: Letter of Enquiry Read the letter of enquiry from Surf Sports Club on page 306.

12. Example 1: Letter of Enquiry Read the letter of enquiry from Surf Sports Club on page 206.

13. Know your Letter of Enquiry 13

14. CHECKING IN Read the table on page 307. Do you understand it? • Who is the potential buyer? • Who is the seller? • When was the letter sent? • What is the enquiry?

15. Quotation A quotation is similar to a price list. It gives: Seller of the goods sends this document to the buyer. • Prices • Rate of VAT • Trade discounts • Cash discounts • Terms and conditions 15

16. Example 2: Quotation Read the quotation from Irish Sports Supplies on page 308.

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18. Know Your Quotation 18

19. CHECKING IN Do you understand the quotation on page 309? • Who is the potential buyer? • Who is the seller? • When was the quotation sent? • What are the prices given? • What are the terms? • What is the quotation number?

20. Order This document is completed by the buyer to place an order for the exact quantity and models required. Buyer of the goods sends this document to the seller. 20

21. Example 3: Order Read the order Surf Sports Club sends to Irish Sports Supplies on page 310.

23. Know Your Order 23

24. Selling on Credit If the seller decides to sell on credit, a credit check should be done to check the buyer is trustworthy. When selling on credit: • Look for a reference • Do a credit check • Take out insurance Why might Irish Sports Supplies decide to sell on credit? • Increase sales and increase profit • Competitors offer credit 24

25. CHECKING IN Do you understand the order on page 310? • Who is the buyer? • Who is the seller? • When was the order sent? • What are the prices given? • What are the terms? • What is the order number? • Who signed the order? • What VAT is payable?

26. Delivery Docket • When the goods are delivered, the person making the delivery will ask the recipient to sign a delivery docket Buyer of the goods signs this document on receipt of the goods. • A signed delivery docket is proof that the buyer received the goods 26

27. Example 4: Delivery Docket Read the delivery docket from Irish Sports Supplies on page 312.

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29. Know Your Delivery Docket 29

30. CHECKING IN Do you understand the delivery docket on page 312? • Who is the buyer? • Who is the seller? • When was the delivery docket presented? • What are the prices given? • What are the terms? • What is the order number? • Who signed the document? • What VAT is payable?

31. Invoice An invoice is sent by the supplier when the goods have been delivered. An invoice: Seller of the goods sends this document to the buyer. • Is a bill – shows all costs • Is sent to someone because they owe the business money • Contains terms – when the bill should be paid, details of discounts 31

32. Financial Record Invoices are used for VAT, a government tax. If you are registered for VAT, you must issue and hold these documents by law. An invoice is a document used for recording financial records. Be the Seller: • An invoice is a bill from the seller; from the seller’s viewpoint it is sales Be the Buyer: • An invoice is a bill received by the buyer for goods purchased; from the buyer’s viewpoint it is purchases 32

33. Example 5: Invoice Read the invoice from Irish Sports Supplies on page 314.

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35. Know Your Invoice 35

36. Know Your Invoice Be aware of what all the initials and terms on the invoice mean. E&OE = errors and omissions excepted. If the seller makes a mistake with prices, the buyer still pays the correct price Trade discount is offered from the seller to the buyer if the buyer is going to sell the goods on. Remember to subtract trade discount from the subtotal and then add on VAT. 36

37. CHECKING IN Do you understand the invoice on page 314? • Who is the buyer? • Who signed the order? • Who is the seller? • What is the VAT number? • On what date was it sent? • What is VAT payable? • What are the prices given? • Are the calculations correct? • What is the total price? • What are the trade discounts? • What are the terms? • What is the order number?

38. WORKING WITH OTHERS #04AFEF Which of the following statements do you think are true or false. Page 316

39. Credit Note A credit note is a document that is sent to correct a mistake: Seller of goods sends this document to the buyer. • If the invoice (bill) is for too much. • To compensate the buyer if the goods have been returned. 39

40. Why Might Goods Be Returned? Goods may be returned: • If goods are damaged • If the buyer receives more than was ordered • If the goods are of inferior quality A credit note must be issued for returned goods. Financial records need to be adjusted to take account of the credit note. 40

41. Example 6: Credit Note Look at the credit note from Surf Sports Club on page 317.

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43. Know Your Credit Note 43

44. CHECKING IN Do you understand the credit note on page 317? • Who is the buyer? • Who is the seller? • On what date was it sent? • Why was it sent?

45. Debit Note A debit note has the same layout as a credit note, but is used when the buyer has been undercharged. Example 7: Debit Note Look at the debit note from Surf Sports Club on page 319. 45

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47. Know Your Debit Note 47

48. Statement of Account A statement of account lists all the transactions between the seller and buyer over a given period. A statement of account is issued by a seller to a customer. eStatements are processed electronically. They are more environmentally friend than paper statements. It includes details of: • Invoices • Payments received • Total amount payable to the customer 48

49. Statement of Account - Continued Before sending the Statement of Account, the seller will: • Check that all transactions are included. • Cross-reference with invoices, credit notes, debit notes, and payments. • Ensure correct discounts have been applied. • Make sure name and address is correct. • Check calculations and totals. • Ensure the statement is paid within the agreed time. • File the statement either manually or electronically. 49

50. Example 8: Statement of Account Look at the Statement of Account from Irish Sports Supplies on page 321.