SALES INVOICE —MEANING, INFORMATION AND IMPORTANCE

A sales invoice is a business document or accounting document that a company uses to ask clients for payment for goods and services. 

It is a business document that the supplier sends to the customer requesting them to pay the price listed on the invoice for the goods delivered or the services rendered to him by the supplier. 

Companies typically use a sales invoice to let customers know how much money they owe them.

A sale invoice serves as the source document for the sales day book/sales journal since credit sales are usually recorded in the sales day book.

The customer has a legal obligation to pay after a sales invoice has been given to him. It cannot be revoked or expunged from sales records as a result.

What information does the sales invoice contain?

The following information is frequently seen in a sales invoice;

1. The number of goods sold to the customer.

2. A description of the goods sold to the customer.

3. Discounts allowed to the customer.

4. Total amount owed by the customer.

5. The seller's name and the company or shop address

6. Date when the sales were made.

7. If applicable, information about the value-added tax charge (VAT).

8. The deadline for payment.

9. Other terms of sales.

10. The seller's signature

11. The sales invoice number. Every page of a business sales invoice has a unique identification number called a sales invoice number. No two invoice pages should have the same invoice number.

Sales invoices are typically created in duplicate and pre-numbered.

The replica is used to update the sales day book while the original is sent to the consumer to request payment.

Importance of the sale invoice

1. Used to record credit sales: The sales invoice is a crucial tool for keeping track of credit sales.

You may calculate a company's total credit sales by adding up the balances on all of its sales invoices.

The credit sales are updated and recorded using the sales invoice in the sales day book, from which point it can use be for preparing financial statements.

2. Informs buyers of payment detail: The sales invoice is used to advise customers of payment information for goods they have purchased as well as to seek payment from them.

The seller can communicate the terms of the transaction and the due date for payment to the buyer through the sales invoice.

3. Legal proof of sales transaction: A sales invoice serve as legal proof of credit sales transaction.

This can be useful, especially if a lawsuit is filed disputing whether sales were made or not.

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