Essential Business Transaction Documents Explained

Business Documents: Key Transaction Records

Business Documents: These are written records of transactions. They record transactions, identify the persons involved, and serve as evidence against any problem presented, supporting the accuracy of transactions recorded in accounting books.

Types of Business Documents

Purchase Order

It is the proof issued by the buyer to order merchandise from the seller, indicating payment terms and method of delivery. It is also called a purchase order.

Sender (Shipping Document)

This document accompanies the seller during the drawing up and delivery of goods sold.

Invoice

This is the document that the seller delivers to the purchaser communicating the amount of merchandise sold on credit or cash.

Ticket (Sales Slip)

Serves the same function as a bill in cash operations used for small amounts. It is issued by the seller's cash registers and delivered to the buyer, remaining recorded in the machine's memory with each operation.

Debit Note

This is the proof that the buyer sends the seller informing him that his debt increased due to: expenses paid by the buyer on behalf of the seller (freight, commissions, etc.), charges that were billed less, or by charging interest.

Credit Note

This is the proof that the buyer sends the seller informing him that his debt decreased due to: return of goods, or having been billed more due to unbilled rebates or discounts.

Receipt

It is the proof that the seller delivers to the buyer as evidence of having received money, checks, promissory notes, or other securities.

Account Summary

This is a document sent regularly (usually monthly) from the seller to the buyer detailing the current account transactions (purchases, payments, debit notes, credit notes).

Promissory Note (Open)

This is the document whereby a person agrees to pay another a sum of money within a specified period.

Deposit Slips

This is the document that the bank delivers to its customers reporting having received money, checks, or other securities as current account and/or savings deposits.

Check

A payment order released against a bank where the drawer has funds deposited into their checking account, authorizing payment or authorization to overdraw (i.e., write checks without sufficient funds if previously authorized by the bank).

Value Added Tax (VAT)

VAT is a national tax levied on the sales prices of goods, works, locations, and services, as well as the debits and credits occasioned by additional bonuses, discounts, interest, returns of merchandise, etc. All persons involved in a sale of goods and services charge or pay VAT.

• The amount of VAT charged is called a Debit Tax.
• The amount paid in VAT is called a Tax Credit.

The difference between the debit tax and the tax credit is deposited monthly into a bank account in favor of the Internal Revenue Service (DGI).