JUNIOR CERT BUSINESS PAPER 2. DOCUMENTS (Ordinary)

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1 JUNIOR CERT BUSINESS PAPER 2 DOCUMENTS (Ordinary) 1

2 DEFINITE QUESTION EVERY YEAR! USUALLY QUESTION 5! Short questions with Documents 2012 Receipt 2011 Order 2010 Order Delivery Docket Q.15 Receipt 2009 Market Research (definition) 2008 Department Store (definition) SQ Q Order Delivery Docket 2004 Check v Quotation SQ Q Delivery Docket 2002 Receipt 2007 Carriage Paid (definition) SQ Q Quotation 2

3 As in any business deal, there are 2 parties the buyer and the seller. Throughout the course of any business dealings, many documents pass between both parties. There is normally one person responsible in every company for purchasing and that is the Purchasing Manager. To do their job properly, they must be effective in their purchasing. Effective purchasing involves buying the right quantity and quality at the right time and price. There are 6 main documents: 1. Letter of enquiry 2. Quotation 3. Order 4. Delivery Docket Receipt 1. LETTER OF ENQUIRY Nowadays, enquiries are normally done by because of the speed of the response. However, enquiries can also be made by: Letter Phone call Call into the shop in person Fax Text Message (Not used much) Information about products can also be found: On websites Classifieds in the newspaper Advertisements such as TV ads and billboards Trade associations Other businesses 3

4 Your address Their address Date Greeting 2. QUOTATION 4

TERMS OF SALE 1. Carriage paid Seller will pay to deliver the goods 2. CWO Cash With Order means payments must be made when ordering the goods. Buying from websites is an example. 3.

5 TERMS OF SALE 1. Carriage paid Seller will pay to deliver the goods 2. CWO Cash With Order means payments must be made when ordering the goods. Buying from websites is an example. 3. COD Cash On Delivery means payment must be made when the goods are delivered. 4. Cash Discount Given to customers who pay promptly within the written period of time. In this example, the buyer will get a discount of 5% if they pay within 10 days of receiving the goods. 5. Trade Discount Reduction in the selling price for people in the same line of business e.g. car manufacturing company would get a discount from a tyre company and vice versa. 6. VAT - Value Added Tax is a tax on consumer spending. A tax is placed on each good and service at each stage of the channel of distribution so that the government doesn t have to wait for the item to be sold. E & OE Errors and Omissions Excepted Means that the person issuing the quotation, statement or invoice is clear from blame if there is a mistake on it. To resolve this, a new quotation, statement or invoice is issued. 3. ORDER Goods can be ordered by any means but it is better to have it in writing. 5

CHECK STOCK It is now necessary for the supplier to check if the goods the customer wants are in stock. It is very important for businesses to have the correct level of stock.

6 CHECK STOCK It is now necessary for the supplier to check if the goods the customer wants are in stock. It is very important for businesses to have the correct level of stock. A good stock control system involves: Having the correct level of stock Stock in good condition Prevent wastage and theft Accurate records of sales and purchases Regular stocktaking Good storage facilities Computerised reordering system CHECK CREDIT RATING When a business sells good on credit, buyers become debtors. Important that these debtors do not become bad debtors (cant repay what they owe). To prevent this, sellers carry out credit checks on the customer. It can do this in 3 ways: 1. Contact Irish Credit Bureau 2. Ask for a bank reference (to see if they have paid back loans) 3. Ask for a trade reference (to see if they have paid back previous bills) 4. DELIVERY DOCKET Issued by seller and lists the goods being delivered. Must be signed 6

Date order processed Quantity of goods Description of goods Price per unit and

7 5. INVOICE An invoice is the document sent from the seller to the buyer and has the following information: No. Order No. Customer No. Date order processed Quantity of goods Description of goods Price per unit and total price Terms of trade including discounts Carriage details and terms VAT details E &OE (Errors & Omissions Expected) 7

8 Discount is subtracted VAT is added The invoice is the source document for the sellers sales book and the buyer s purchases book. 6. RECEIPT Written acknowledgement of payment which is signed by the seller and given to the buyer. 8

9 IF ASKED HOW TO PROCESS DOCUMENTS... CHECK, COMPARE & FILE CHECK Prices Quantity Model Numbers Name & Address of supplier Discounts Etc COMPARE AGAINST Previous document e.g. compare the order with the quote, compare the delivery dockets with the order, compare the statement with the invoices and credit notes, etc FILE IT...for future reference. 9

JUNIOR CERT BUSINESS PAPER 2. DOCUMENTS (Higher)

JUNIOR CERT BUSINESS PAPER 2. DOCUMENTS (Higher) JUNIOR CERT BUSINESS PAPER 2 DOCUMENTS (Higher) 1 DEFINITE QUESTION EVERY YEAR! USUALLY QUESTION 2! Short questions with Documents 2012 Mark-Up Delivery Docket Processing Delivery Dockets Credit Note Sales