A commercial document or bill presented to a buyer by a seller,that indicates what has been purchased, in what amount and for what price. A purchase invoice can be used to prove that something was bought and how much was paid for it. There are two type of document one is Performa/ Challan and another one is Actual Invoice, Now how this two are different and what are the requirement of these two documents, Lets us take an example Suppose When buyer receive goods from supplier a challan document is also received by buyer, which is not the original invoice but the supplier's document which facilitate purchase entry for goods received , But this also causes various cases, lets take a look:
- Payment of a purchase invoice
Try and pay your purchase invoices on time, if there is a problem with cash flow try and sort out a short term payment plan. If you always refuse to take supplier phone calls they are likely to take further action and maybe try and claim the money back through the county courts. If this were to happen, all the costs and interested incurred by your supplier would then need to be paid by you. There are a few things you could do to try and delay payments of purchase invoices if cash flow is tight. The first is to only make payments when they have been requested from the supplier. You could also introduce a cheque run date: such as once a week or once a month. Once you've set up a system, it will allow you to keep a better control on your finances and your suppliers would then know when they would be paid, and know not to expect a cheque the same day as their phone call. the items.
- Supplier Statement:
Your supplier should supply you with a monthly statement of account. Check to see if you have received all the purchase invoices and also to see if all payments that you have made have been posted correctly. If there are any discrepancies, contact them to try and get the problem sorted. Try and keep a good relationship with your suppliers: there is nothing worse than phoning up with an order only to find out that they will not ship any goods to you until payment is made for an outstanding purchase invoice or they will only offer you cash with order.
- Filing a purchase invoice:
Suppliers use purchase orders for order fulfillment and payment processing. Upon receipt, the purchase order is used to pull purchased inventory for packaging and shipping.Once the inventory is pulled, an invoice is prepared based on the items orders and prepared for shipment. When the products are shipped, the supplier records the shipment in its inventory system. The purchase order is filed electronically, with paper copies often filed, as well.The order is marked as filled or waiting payment. Important payment reminder dates and deadlines are set. This is important to the supplier for good payment monitoring and enforcement of credit policies.
See Also: Purchase Order | Purchase Return