On receipt of goods, the buyer compares amongst the particulars inwards the invoice and/or order. On a comparison, the buyer may observe roughly discrepancies. In such a case, he volition guild a complaint amongst the seller. On receipt of the complaint, the seller verifies the nature of a complaint in addition to and then promptly makes necessary adjustments.
Necessary adjustments are made inwards honour of claims arising out of errors inwards the invoice or delivery of defective goods past times exchanging debit banking concern annotation in addition to credit banking concern annotation betwixt the buyer in addition to the seller.
What is Debit Note? Meaning ↓
A debit banking concern annotation is a document which debits the concern 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 inwards 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 annotation to the seller informing him that he has debited the seller's concern human relationship amongst the amount of the goods returned. By sending the debit note, the buyer reduces his liability towards the seller. The commons contents of the Debit Notes are series number, lift in addition to address of the sender (buyer), appointment of issue, lift in addition to address of the receiver (seller).
When Debit Note is Sent?
The debit note is sent inwards the next cases :-
- On returning the goods, the buyer sends a debit banking concern annotation to the seller. The goods may move 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 inwards calculation or omission of items inwards the invoice.
- When the buyer is overcharged, he sends a debit banking concern annotation to the seller for effecting the necessary adjustment.
What is Credit Note? Meaning ↓
Credit Note is a banking concern annotation sent past times 1 political party to roughly other on crediting the account. The credit banking concern annotation may move required due to calculation mistakes inwards the invoice or occupation 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 inwards 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 appointment of the note.
- Reference to the invoice received earlier.
- Reference of the goods received dorsum or returned back.
- Amount that is to move adjusted.
- Signature of the political party issuing the note.
It is to move noted that either political party tin post a note, 1 time the mistakes are noticed or goods returned. The political party receiving a exceptional banking concern annotation must admit it past times sending the contrary type of note.
Thus, debit in addition to credit notes assistance inwards making necessary adjustments inwards the books of account.
