The Types and Functions of Bill in Business Transaction

In a company’s activities, buying and selling is important because it affects the company’s development. Especially trading companies. As evidence of the buying and selling process, a valid proof of payment will usually be issued. 

Proof of payment can also be used to complete the records of every transaction for business actors. Proof of payment has various types, one of which is a Bill. We often see it and used by business activists have several types according to their function. In addition, it can also be used as a means of matching between goods and recorded transactions.

The notion of a bill is containing certain transactions that can be used as valid evidence of the purchase of a product or service that is provided to the buyer. Usually, the note is made in duplicate, one sheet for the buyer and a second sheet for the seller.

Read more: The definition and formula of account receivable turnover

Some of the things contained in the Bill include:

1. There is the name of the company
2. Billing number
3. date of transaction
4. Number of goods
5. Type of goods
6. Unit
7. price
8. Total price Total price
9. Name of recipient

Almost all levels of society are familiar with notes which is valid evidence of the buying and selling process. When there is an item that is not suitable, it can be used to return the item to the seller. Usually when that happens, when returning the goods, usually the seller will provide a return bill but with a different type. It will help the seller to make adjustments to the transactions that have been recorded.

Everything in the note is a note for the seller. The things recorded in the notes can affect the credit debit notes in company transactions. Notes can also be used as a benchmark for quickly seeing the number of items sold in one day or one month.

The function of bill

Its functions itself can be seen in each note type. The function of notes in general that we can use in our business are as follows:

• Knowing the number of products sold
• The total amount of payments
• As a valid receipt and proof of valid transactions in the buying and selling process
• As a source of data in the books of a company for a certain period

Read more: The best example of payment collection invoice

The followings are the types of bill:

• Cash

It is an evidence of transactions made to document transactions for purchases or sales in cash. It is made in duplicate, which we usually call the original and a copy of the bill. The copy is usually used for the shop owner’s file.

• Sales Bill

A sales bill is a receipt or proof of a purchase of goods in cash and is given by the seller to the buyer. In general, it has two copies, the first page is held by the buyer, the second page is held by the seller as a book-keeping document.

• Debit

Debit notes are proof that a company has debited its customers’ estimates for various reasons. A debit note is sent by the company to its customers because the purchased item is returned because it is damaged or is not in accordance with the order, and the seller agrees that the item is returned or the price is reduced. 

• Credit 

It is an evidence of a transaction for receiving back goods that have been sold on credit to certain parties. The goods are returned goods that do not arrive according to order or are damaged. The shop owner will re-check the previous invoice documents to make adjustments for the items returned to the seller. The use of this credit bill can be applied to all buyers or only certain buyers, it all depends on the shop owner.