In this chapter we will cover the main documents used in home trade including the key information and purposes of – enquiry, quotation, catalogue, price list, invoice, advice notice, delivery note, credit note, statement of account, receipt.

Documents of Home Trade

To enable trade to be conducted on credit with customers who purchase regularly.

To enable contact between the buyers and the seller.

Using documents when doing business with other companies helps to avoid mistakes as there are many transactions being made in one day

Why are commercial documents used in trade?

Enquiry Quotation/catalogue and price list Order Delivery note Invoice Credit note Statement of account Cheque Receipt

Terms used in documents of Home Trade

Enquiry Is sent by the buyer to the seller to obtain

information about the goods and services offered by the seller.

Is a reply sent to the potential buyer giving details about the goods or services described in the enquiry

Quotation

May be sent instead of a quotation if the buyer wants to know the range of the sellers products.

Catalogue and price list

Is also known as the purchase order. This is sent from the buyer to the seller showing details of what has to ordered

Order

When the invoice is prepared several copies are prepared at the same time one of thes copies is the advice note which tells the buyer that the products have been dispatched.

Advice note

Is another type of invoice which is sent with the goods to the buyer.

Delivery note

Is the bill completed by the seller for the goods bought on credit. It may accompany the goods of it may be sent separately.

Invoice

Is usually printed in red or pink to distinguish it from the invoice because it represents money going out of the business

Credit note

Is prepared by the seller at the end of a trading period usually a month. It shows the transactions for the month.

Statement of Account

Is the document which shows that a payment has been made. It acts as the proof of money received.

Receipt