Learning Aim B - Financial documents Flashcards
List 5 examples of financial documents
- receipts
- purchase orders
- invoice
- credit notes
- statement of account
Why is keeping financial documents important?
- to organise payments/money received
- to keep a record of what they owe/others owe them
- to ensure accounts are correct
- to analyse performance
What is the sequence of documentation?
ENTERPRISE TO SUPPLIER:
* purchase order
* payment/remittance advice
SUPPLIER TO ENTERPRISE:
* delivery note
* invoice
* receipt
* statement of account
ENTERPRISE TO ENTERPRISE:
* goods received note
What is a purchase order?
- purpose of a purchase order is to communicate which specific services or products a customer wishes to purchase from a seller
- seller knows what the customer wants
- buyer knows they aren’t being overcharged
- order code = track and traceable
What is a delivery note?
- provides a list of their quantity of products in a delivery
- should match the purchase and contents of delivery
What is a goods received note (GRN)?
- provides an accurate record of what has been received against what has been ordered
- commonly signed by the recipient to confirm correct delivery
What is an invoice?
*lets a buyer/customer know via a written document what they purchased and how much they owe the supplier/seller
* payment details provided
What is a remittance advice?
- provides a notice of payment sent by a customer or supplier
What is a receipt?
- confirms a transaction has taken place between a buyer/customer and seller/supplier
What is a credit note?
- shows a return of funds in the event of damaged products, an invoice of error or missing items
What is a statement of account?
- shows all the transactions that have taken place between a buyer and a seller over a particular period
How to calculate the total price?
- total price = quantity x unit price
How to calculate the percentage?
- subtotal x percentage amount / 100
Impacts of cash on customers
ADV: accepted at almost all enterprises
DISADV: cannot be used online, mistakes can be made, not suitable for larger payments
Impacts of debit card on customers
ADV: no cash necessary, can be used contactless, can be used online
DISADV: can be lost/stolen
Impacts of payment technologies on customers
ADV: no need to carry cards, can be used online, quick/convenient
DISADV: buyer can be charged a fee
Impacts of credit card on customers
ADV: contactless, maximum spend limit, can get cashback/loyalty points
DISADV: late repayments are expensive, can be lost/stolen
Impacts of direct debit on customers
ADV: easy way to pay monthly bill, can get discounts, amount taken can vary
DISADV: must have enough money to pay
Impacts of cash on enterprise
ADV: instant payment
DISADV: cost of handling/banking, cost of accepting counterfeit notes
Impacts of debit card on enterprise
ADV: enables online payment/phone payments
DISADV: risk of fraud, 24-72 hours to clear payment, cost of processing ( 0.25-0.6% )
Impacts of payment technologies on enterprise
ADV: easy to accept
DISADV: may have setup costs, usually no extra fee but still banking fee, risk of fraud if unprotected phone
Impacts of direct debit on enterprise
ADV: easy way to pay monthly bills, easy way to collect flexible payments
DISADV: customers must have enough money
Impacts of credit card on enterprise
ADV: enables online/phone payments
DISADV: risk of fraud, 24-72 hours to clear payment, 0.3-0.9% cost of processing
Influences affecting customers choice of payment? (6)
- ease of payment
- use of technology
- security/safety
- use of credit
- lifestyle
- availability/convenience
