ASSIGNMENT

Assignment

Assignment

Introduction

This paper intends to explore various concepts regarding credit control. The major focus of this paper is on attempting the given 5 tasks. These tasks are about invoice, credit account form, bad debts, credit insurance, delivery note, credit note and so forth. The detailed explanation shall provide a deep insight about credit control of a business.

Discussion

Task 1:

Invoice

An invoice is a bill sent to the purchaser of the product issued by the seller of the product. The invoice creates an obligation for the purchaser to make payment of a sum of money for the product as mentioned in the invoice. A general invoice includes following sections (biztaxlaw.com);

Date when invoice is created

Name of the purchaser and seller

Address of the purchaser and seller

Contact name

Item detail and description that is purchased

Terms and conditions of the payment, for instance the seller may state to receive the full payment in 30 days, thus customer is liable to pay the full amount within the specified period.

Aged Debtors Report

In aged debtor report it consists of a list which entails a detailed account of debtor (customer) who owes the money to the said organization. Further, it also includes the details regarding the amount of liability and the specified time when the payment is due. This report has the information of all the debtors of the organization, thus it holds great significance for owner of the business. An example of the Aged Debtors Report is illustrated in the below figure;

Source: e-conomic.co.uk

Delivery Note

A delivery note consists of details about the product that is being purchased, which further includes the description and quantity of items purchased. In short, it gives the detail of the items ordered by the customer and is now being sent to him by the seller. Sometimes, the delivery note requires the signature of the customer upon receiving the ordered item and then sends it back to the seller as a proof of delivery (e-conomic.co.uk). However, a delivery note does not contain the prices of the item like an invoice, it only has the description and the number of items purchased.

Credit Note

A credit note is issued by the seller when the cost price gets reduce after the issuance of the tax invoice, for instance when the defaulted items are returned to the supplier. However, a credit note must contain the following elements (ird.govt.nz);

A credit note must clearly show the words of “credit note”

Date when it was created

Name of the business and details of VAT

Address and name of the customer

Concise description of the credit note

Source: easybizsoftware.com

Chase Letter

The term Chase letter refers to those letters when it is written in times of serious problems, such as when an individual owes you money and the due date has been crossed. Thus chase letters is drafted as a reminder for them. Instead of taking any action against the debtor, it is always recommended to write a chase letter to them. Usually a chase letter always gets the payment 90% of the time ...