Preparation and Acceptance of Bill and Invoice
Once an order is received, it immediately goes to the sales office personnel who records the details, fills in missing details and completes calculations. When all vitals are assembled, a customers’ bill or invoice is made out. There are various mechanised procedures used in spreading up the preparation of bills and invoices. They include:
i. Computer
ii. Typewriter
iii. Calculator combination
iv. Adding machine adaptation
v. Cash register adaptation
Procedures for Making Payments
There are various methods that can be used to make payment for goods and services. Some of these are:
· By Cash
· By Cheque
· By Bank draft
By Cash
Coins and notes are usually accepted as a means of payment for goods and services. People offer cash to settle bills for goods and services. Cash however, has an advantage of being readily acceptable to both the public and all trading concern.
By Cheque
A cheque is a written order to a bank to pay on demand a stated sum of money written on it and usually bears the name of the person to whom it is to be paid. Money is withdrawn from a current account by cheque.
A cheque can be open or crossed. If open, the cheque can be cashed over the counter at the bank. A crossed cheque is a cheque with two parallel lines drawn across the payee’s name and cannot be cashed at the counter but be paid into an account.
By Bank Draft
This is like a cheque drawn by the bank on itself. Bank draft is like a cheque which can be cashed over the counter in the bank. It is automatically paid when presented at the bank. A traveler’s cheque is a special type of bank draft. A bank draft is normally payable on demand or on the date stated on the draft. To get a bank draft, the person who wants to make the payment goes to the bank to fill out a form requesting a draft to be prepared to a named person. The bank account of the sender is charged with the value of the remittance, plus commission.
Preparation and Issuance of Receipts
A receipt is a business document issued to the buyer by the seller in respect of a sum paid. It is therefore, a legal evidence of payment. Receipt is usually written out for payments by cash for the amount of goods purchased and must be sealed by stamp or signature or even both. There are some things to bear in mind when computing or preparing a receipt and they are:
i. Write the receipt as carefully as you would write a cheque.
ii. Be particularly careful to record the date, the amount and the identification accurately and legibly.
iii. Use a pen that is less likely to fade and that is more difficult to alter.
iv. Make a carbon copy of the receipt and check to see that all information written in words and figures and reason for the payment has been recorded.
v. Never write a receipt using a pencil.
Tests and Exercises
1.The mechanised procedures used in spreading up the preparation of bills and invoices include the following except ……. (a) computer (b) typewriter (c) television (d) adding machine adaptation. Answer: Television
2.Once an order is received, it immediately goes to the ……. office. (a) sales (b) purchases (c) personnel (d) administrative. Answer: Sales
3.The following are methods that can be used to make payment for goods and services except …… (a) cash (b) cheque (c) paper (d) bank draft. Answer: paper
4.…….. is a legal evidence of payment. (a) receipt (b) invoice (c) teller (d) bill of exchange. Answer: Receipt
5.All are things to bear in mind when preparing a receipt except …… (a) Record the date and the amount (b) write carefully as you would write a cheque (c) write a receipt using a pencil (d) Make a carbon copy of the receipt. Answer: write a receipt using a pencil
For more on classwork notes, click here
