The documents generated during the accounts payable process are listed below:
A purchase order (PO) is a commercial document and an initial official offer issued by a buyer to a seller, indicating the types, quantities and agreed prices for the products or services that the seller will supply to the buyer. Sending a purchase order to a supplier constitutes a legal offer to purchase products or services. Acceptance of a purchase order by a seller generally forms a contract between buyer and seller, so no contract exists until the purchase order is accepted. It is used to control the purchase of products and services from external suppliers. Creating a purchase order is usually the first step in the purchase-to-pay process in an ERP system.
An invoice or invoice is a commercial document issued by a seller to a buyer, showing the products, quantities and agreed prices for the products or services that the seller has provided to the buyer. An invoice shows only the sales transaction. Payment terms are independent of the invoice and are negotiated by buyer and seller. Payment terms are usually included on the invoice. Invoices are received from the supplier during the purchase process for payment and can relate to both products and services.
A commercial invoice is a document used in foreign trade. It is used as a customs declaration provided by the person or company exporting an item across international borders. Although there is no standard format, the document must include some specific information such as the parties involved in the shipping transaction, the goods transported, the country of manufacture and the Harmonized System codes for these goods. A commercial invoice must also include a statement that the invoice is accurate and a signature. A commercial invoice is used to calculate tariffs, international trade terms (like cost in a CIF) and is commonly used for customs purposes.
FIRC – Foreign Remittance Certificate
Overseas Remittance Certificate (FIRC) is a certificate issued by the bank to the account holder as proof of remittance to India. Most statutory authorities use this document as proof that an individual has received payment in foreign currency from outside the country.
A voucher is an accounting document representing an internal intention to make payment to an external entity, such as a supplier or service provider. A purchase order is typically generated after a vendor invoice is received, once the invoice has been successfully associated with a purchase order. A voucher will contain detailed information regarding the beneficiary, the monetary amount of the payment, a description of the transaction, etc. In accounts payable systems, a process called “payment cycle” is performed to generate payments corresponding to outstanding vouchers. These payments may then be released or withheld at the discretion of an Accounts Payable Supervisor or Company Comptroller.
A document used by a buyer to notify a seller of the quantity and dollar amount of returned goods and requesting that the dollar amount be returned to the buyer. A debit note is often used to return goods on credit. The seller then issues a credit note to the buyer indicating that the goods have been received and that the buyer will not have to pay for them. This is also called “debit memo”. A debit note may also be issued for other adjustments such as loss in transit, discounts beyond what has been agreed or certain other transactions, which justify an adjustment of the invoice.
Challan Excise Duty
The excise duty challan is the documentary proof of the payment of the excise duty. Excise duties are payable to the authorities and the way generally handled in the ERP is to define the tax authority as the supplier. Therefore, this document is also part of the purchase-to-pay process. An excise duty or excise tax (sometimes called a special excise duty) is an internal tax on the sale or production intended for the sale of specific goods or a tax on a good produced for sale or sold in a countries or licenses for specific activities. Excise duties are distinct from customs duties, which are import taxes. Excise duties are internal taxes, while customs duties are border taxes. An excise is considered an indirect tax, which means that the producer or seller who pays the tax to the government is expected to try to recover or displace the tax by increasing the price paid by the buyer. Excise duties are usually imposed in addition to another indirect tax such as a sales tax or value added tax (VAT). In India, almost all manufactured goods are included in excise duty. In India, to get the excise tax, the government. of India has done central excise tax automation and services with this, manufacturer can easily pay their excise tax online every 10th of next month via ER -1.
Declaration Service Tax & Service Tax Challan
Service tax is a tax imposed by the Indian government on services provided in India. The service provider collects the tax and pays it to the government. It is levied on all services with the exception of services on the negative list of services. All assessments are required to file a service tax return with the authorities along with copies of tax challans paid. The service tax is payable to the authorities and the way generally handled in the ERP is to define the tax authority as the supplier. Therefore, this document is also part of the purchase-to-pay process.
TDS Back & TDS Challan
TDS is one of the modes of payment collection, whereby a certain percentage of taxes is deducted by one person at the time of making/crediting some specific nature of payment to the other person and the deducted amount is remitted to the government account. It is similar to the “pay as you earn” system, also known as withholding tax in many other countries, one of the countries being the United States. The concept of TDS envisages the principle of “pay as you enjoy”. It facilitates the sharing of responsibility for tax collection between the deductor and the tax administration. It ensures the regular supply of liquidity to the State. It acts as a powerful instrument to prevent tax evasion and widen the tax net. The tax must be deducted at the time of payment in cash or check or credited to the recipient’s account, whichever comes first. The credit to the credit account or the suspense account is also considered as a credit to the beneficiary’s account and the TDS must be made at the time of this credit. The deductor is the employer in cases where the payments are wages. A debtor is required to issue a TDS certificate to the debtor within a specified time. Returns must be filed at regular intervals with the tax authorities and returns must contain details of payments made to a central government account, for TDS. TDS is payable to the authorities and the way generally handled in the ERP is to define the tax authority as the supplier. Therefore, this document is also part of the purchase-to-pay process.
Withholding tax challan
Under the Income Tax Act, each assessee is liable to pay tax in a given fiscal year, preceding the tax year, on an estimated basis. However, if this estimated income is less than 10,000, no withholding tax is due. The advance tax is payable to the authorities and the way generally managed in the ERP is to define the tax authority as the supplier. Therefore, this document is also part of the purchase-to-pay process.
VAT return and VAT Challan
A value added tax (VAT) is a form of consumption tax. From the buyer’s point of view, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material or service, from an accounting point of view, by that stage of its manufacture or distribution. The manufacturer remits the difference between these two amounts to the government and keeps the rest for itself to offset the taxes it had previously paid on the inputs. VAT was introduced in the Indian tax system from 1 April 2005. Out of the 28 Indian states, eight have not introduced VAT. Each Indian state has a different sales tax. VAT is payable to the authorities and the way generally managed in the ERP is to define the tax authority as the supplier. Therefore, this document is also part of the purchase-to-pay process.