On receipt of goods, the buyer compares amongst the particulars inward the invoice and/or order. On a comparison, the buyer may detect simply about discrepancies. In such a case, he volition venture a complaint amongst the seller. On receipt of the complaint, the seller verifies the nature of a complaint in addition to and therefore promptly makes necessary adjustments.
Necessary adjustments are made inward abide by of claims arising out of errors inward the invoice or delivery of defective goods past times exchanging debit banking concern bill in addition to credit banking concern bill betwixt the buyer in addition to the seller.
What is Debit Note? Meaning ↓
A debit banking concern bill is a document which debits the describe of piece of work organisation human relationship of the political party to whom it is sent. It shows the details of the amount amongst which the client is debited. It is inward the shape of an invoice. The political party who sends it becomes a creditor in addition to the political party to whom it is sent becomes a debtor.
Along amongst the defective goods, the buyer sends a debit banking concern bill to the seller informing him that he has debited the seller's describe of piece of work organisation human relationship amongst the amount of the goods returned. By sending the debit note, the buyer reduces his liability towards the seller. The park contents of the Debit Notes are series number, cite in addition to address of the sender (buyer), engagement of issue, cite in addition to address of the receiver (seller).
When Debit Note is Sent?
The debit note is sent inward the next cases :-
- On returning the goods, the buyer sends a debit banking concern bill to the seller. The goods may hold upward returned when they are defective, damaged, faulty or non according to the samples provided.
- The seller may post it to the buyer when the buyer is charged less due to problems inward calculation or omission of items inward the invoice.
- When the buyer is overcharged, he sends a debit banking concern bill to the seller for effecting the necessary adjustment.
What is Credit Note? Meaning ↓
Credit Note is a banking concern bill sent past times 1 political party to simply about other on crediting the account. The credit banking concern bill may hold upward required due to calculation mistakes inward the invoice or work amongst the goods supplied. The political party who sends it becomes a debtor in addition to the political party to whom it is sent becomes the creditor.
When Credit Note is Sent?
The credit note is sent inward the next instances :-
- The seller sends it to the buyer on receipt of goods returned dorsum past times the buyer.
- The buyer sends it to the seller when he has been undercharged.
- The seller sends it to the buyer when he has overcharged the buyer.
Contents of Debit in addition to Credit Notes ↓
The contents of debit in addition to credit notes are :-
- Name in addition to address of both the parties, i.e. the 1 who is issuing in addition to the other to whom it is issued.
- Serial number in addition to engagement of the note.
- Reference to the invoice received earlier.
- Reference of the goods received dorsum or returned back.
- Amount that is to hold upward adjusted.
- Signature of the political party issuing the note.
It is to hold upward noted that either political party tin sack post a note, in 1 lawsuit the mistakes are noticed or goods returned. The political party receiving a especial banking concern bill must admit it past times sending the contrary type of note.
Thus, debit in addition to credit notes assistance inward making necessary adjustments inward the books of account.
