Details shown on hire purchase goods
- Cash price of goods.
- Total hire purchase ie cash price, finance charges.
- Amount and number of installments.
- Finance charges.
- Types of goods
Importance of finance companies in hire purchase transaction
- Pay ready cash by providing capital to traders.
- Buyer is indebted to the finance house.
- Traders collects installments from debtors on behalf of finance company.
- Relieves trader of all risks of bad debts and legal responsibility.
- Makes profit from interest charged.
Credit sales agreement
- Credit sale is sale based on trust
- Written agreement is not necessary.
- Deposit is not required.
- Buyers own goods as soon as agreement is made.
- seller cannot repossess goods if customer defaults.
- Seller can sue the customer for outstanding payment.
- Installments are spread over a few months.
- A short period of repayment.
- Contract is based on trust and there is no strict legislation.
- Customer can sell the goods.
- Deal for non durable goods eg clothes.
- Interest is charge at low rate.
Business documents
- LETTER OF INQUIRY
- A letter written by buyer to supplier
- Request for the following information:
- Type of goods available
- Size of goods.
- Price of goods.
- Terms of payment eg credit or discounts.
- Terms of delivery.
- Indicate the date of issue.
- CATALOG
- Shows price of goods.
- Statements of sales and after sales services.
- Used as an advertising by order firms.
- Shows codes of products.
- ORDER NOTE
- Written by buyer to the suppliers.
- Prepared in at least two copies.
- Show names and addresses of buyer and seller
- States expected time of delivery and method of payment
- Quotes the catalog number or quotation number.
- Show the quoted prices.
- PROFOMA INVOICE
- Sent by supplier to a potential buyer.
- A document in the form of an invoice.
- Contain details of goods send on consignment.
- May be used as a quotation.
- Shows units prices and discounts.
- Used to apply for foreign currency.
- Used to request payment before goods are delivered.
- INVOICE
- Summarize a single transaction.
- An evidence of contract of sale.
- A bill sent by suppliers to buyer.
- Used when goods are sold on credit.
- Shows details of goods in terms of:
- Unit price.
- Total price.
- Quantities of goods.
- Terms of payment.
- Description of goods eg color and size.
- Date of purchase.
- VAT
- Invoice number.
- Interest to be added on specific periods.
- Used for accounting purposes.
- ADVICE NOTE
- Sent by supplier to the buyer.
- Notifies the buyer that goods are on the way.
- Enables buyer to check whether correct oder has been dispatched.
- Shows:
- Date of dispatch.
- Method of dispatch.
- Terms of dispatch.
- Description of goods.
- Names and addresses of buyer and seller.
- DELIVERY NOTE
- Issued by supplier to the buyer.
- Written in duplicate.
- Used when seller uses transport to deliver goods
- Sent with goods.
- Used to check state and quantity of goods.
- Provides proof of delivery if signed.
- shows:
- Addresses of buyer and supplier.
- Description of goods.
- Quantities of goods.
- Methods of delivery.
- Used as a record of proof of delivery.
- CONSIGMENT NOTE
- Used when transport is hired.
- Issued in triplicate.
- Sent together with goods.
- Is a contract of carriage
- State the terms and conditions of carriage.
- Specifies the part responsible for payment of carriage and delivery.
- Shows:
- description of goods.
- Quantities of goods.
- Markings or crate numbers.
- Freight charges.
- Names and addresses of consignee and consignor
- Address of delivery.
- Date of delivery.
- CREDIT NOTE
- Issued by supplier to buyer.
- Used to correct an overcharge arising from return of empty bottles,overstating the invoice, return of unsatisfactory or shady goods.
- Printed on red or pink.
- Used when a supplier owes buyer money.
- Shows:
- Names and addresses of buyer and seller.
- Credit note number.
- The overcharged amount.
- The reduction of amount owing.
- Date of issue.
- DEBIT NOTE
- Issued by supplier to buyer.
- Used to top up payment for goods already delivered. Correct undercharge.
- Shows:
- Names and addresses of buyer and supplier.
- Amount of undercharge or amount to be paid.
- Date of issue.
- Debit note number.
- STATEMENT OF ACCOUNTS
- Summary of transactions over a period of time- usually one month.
- Issued by supplier to buyer.
- Issued when goods are bought on credit.
- Shows:
- Name and address of buyer and supplier.
- Amount due.
- Credit notes or adjustments.
- Rate of interest.
- Installment.
- Terms of payment.
- Reminds customer that payment is due.
- RECIEPT
- Issued by supplier to buyer
- Used to acknowledge cash payments.
- Shows:
- date and time of purchase
- Shows description of goods
- Unit prices
- Total prices
- Codes of goods
- Total paid
- Change if any
- Names of supplier
- Name of till operator.
- TILL SLIP
- Issued by supplier to buyer.
- Shows cash payments.
- Evidence of cash sale.
By: T.Titus Nyakudyara
Twitter: @NyakudyaraTitus
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