Difference Between Purchase Order and

Sales Order
December 8, 2014 By Surbhi S Leave a Comment

The two terms purchase and sales are not new to us, we clearly understand it
because we go through with these two terms daily, but what we dont know is
about purchase order and sales order which is quite difficult. Come and lets
understand the meaning and the difference between Purchase Order and Sales
Order.

Content: Purchase Order Vs Sales Order

1. Comparison Chart
2. Definition
3. Key Differences

4. Similarities
5. Conclusion

Comparison Chart
BASIS OF
COMPARISON

PURCHASE ORDER

SALES ORDER

Meaning

Purchase order is a document

used for ordering goods.

Sales order is a document used

for confirmation of sale.

Details

Prepared by Company and sent

to the supplier.

Issued by Company to Customers

before delivery.

Effect of acceptance

Creates a contract between

company and supplier.

It approves the sale.

Definition of Purchase Order

A written commercial document prepared by the buyer containing types, prices,
quantities and terms of the goods to be bought or sold and services to be provided
and sent to the seller is known as Purchase Order (PO). When the seller accepts
the terms offered by the buyer and agrees at a certain point, it becomes a binding
contract between both the parties.

Definition of Sales Order

A written commercial document issued by the seller to its customers containing
the details of merchandise and services to be rendered before actual delivery is
known as Sales Order (SO). In other words, it is a document for which approves
sales and consist of various details like date, mode and time of delivery etc.

Key Differences Between Purchase Order and Sales

Order

1. When Purchase Order is accepted, it becomes a binding contract between

buyer and seller. On the other hand, when the sales order is accepted, it
approves the sale.
2. With the help of PO the buyer can order goods while with the help of sales
order, the buyer can know the date, time and mode of delivery of goods and
services.
3. Purchase Order is prepared by the company and sent to the supplier of
goods and services, whereas the Sales Order is issued by the company to its
customers.

Similarities
Contains details for merchandise and services.
Written commercial document.

Conclusion
Purchase Order and Sales Order are somewhere interconnected because when the
Company sends PO to its supplier, and he accepts the proposal after agreeing
with the terms and conditions he sends the SO for the confirmation of sale which
after the delivery of such goods or services completes the transaction.
----------

Difference Between Voucher and Invoice

December 16, 2014 By Surbhi S Leave a Comment

Every company records full details of its transactions in such a way that at the
end of the accounting period exact profit is determined. For this purpose the
vouchers and invoices are being kept by the company for recording full details of
transactions. These two entities are quite confusing and which is not clear to
many people. Come and lets understand the difference between Voucher and
Invoice.

Content: Voucher Vs Invoice

1. Comparison Chart

2. Definition
3. Key Differences
4. Similarities
5. Conclusion

Comparison Chart
BASIS OF
COMPARISON

VOUCHER

INVOICE

Meaning

The voucher is termed as a written

internal document used for
recording a liability or debt to make
payment to the supplier or seller of
goods or services.

An invoice is termed as a written

commercial document issued to
buyer by seller for indicating
details of the sale transaction of
goods or services.

Types

Receipt, Payment, Purchase, Sales,

Journal, Contra etc.

Excise Invoice, Commercial

Invoice, Tax Invoice, Proforma
Invoice etc.

Description

Name, Address and other details of

payee, transaction details, amount,
date, etc.

Items and its quantities, prices,

amount, discount details (if given),
date, credit terms and payment
details, etc.

Definition of Voucher
A voucher is a written document used by the accounts payable department of any
organization. It represents that a liability or debt against any external party which
is to be paid off by the entity itself. The voucher is generated after matching with
three different documents which is purchase order, invoice and receiving report.

After matching with the above three documents the voucher is attached to them.
The voucher must be signed by the company so that the further proceedings can
be done. These vouchers are working as an audit evidence and very beneficial for
auditing purposes as proper records of all the transactions are kept by the
company.

Definition of Invoice
An invoice is a commercial document which is further not negotiable to any other
person. It is provided by the seller to the buyer of goods or services, indicating the
quantities of items purchased, agreed prices, discount, terms of credit and
payment details. It is a sales invoice for the vendor while purchase invoice for the
buyer.
When the sale of goods or services done in credit the invoice becomes a trade
receivable for the seller while trade payable to the buyer.

Key Differences Between Voucher and Invoice

1. The voucher is a document for recording liability while Invoice is a list of
goods sold or services rendered, issued by the supplier to customer when
sales is done.
2. There are 6 types of vouchers whereas there are 4 types of invoices.
3. Vouchers contain details of the total quantities, the total amount of the
goods purchased and ledger to which it has been recorded. On the
contrary, an invoice contains details of the goods purchased from a
particular company.

Similarities
Written Document.
Retained by the company for future references.

 Details of transaction.
Acts as an evidence at the time of auditing.

Conclusion
Now a days, due to the emergence of electronic system, these documents are also
available in either electronic form or paper form or both, depending upon the
policies of the organization. The voucher is dependent on the invoice because it
can be made only when it is matched with the three documents discussed above
and invoice is one of them. Hence, they are not contradictory in nature, but
completes each other. With the help of these two documents full tracking of the
transaction can be done, which acts as a proof at the time of auditing. Apart from
that it is a written as well as authorized documents which also works as a good
audit evidence.
------

Difference Between Invoice and Cash

Memo
February 11, 2015 By Surbhi S 1 Comment

A business transaction contains various stages which start from the purchase
order and ends on the final payment of the merchandise. Numerous vouchers are
involved in it which states the details about the transaction. Whenever you
purchase any commodity you will get invoice, receipt and cash memo. Have you
ever tried to differentiate the invoice and cash memo?
When you buy goods you will either get the bill or invoice which is followed by a
cash memo. In this article we are going to discuss the difference between invoice
and cash memo.

Content: Invoice Vs Cash Memo

1. Comparison Chart
2. Definition
3. Key Differences
4. Similarities

5. Conclusion

Comparison Chart
BASIS OF
COMPARISON

INVOICE

CASH MEMO

Meaning

A commercial document issued

by the seller to the buyer to make
a request for payment.

A commercial document issued by

the seller to the buyer when cash is
received as a payment.

Time of Issue

Prior to payment.

At the cash payment.

Issued at the time of

Credit Sales

Cash Sales

Evidence of

Payment Due

Payment Received

Definition of Invoice
An Invoice is a non-negotiable instrument which indicates the indebtedness of
the purchaser to the seller. It is given by the seller to the buyer for making a
request of payment for the goods sold or services rendered to him. It is used to
record day to day the sale transaction.
A typical invoice may contain the following details:
Date of issue of invoice
Invoice Number
Name and address of buyer
Name and Address of seller
Unit Price of Goods

 Quantity
Discount (if any, but only trade discount)
Tax (VAT or Service tax as the case may be)
Total Amount due
Signature of the seller or his authorized agent.

Definition of Cash Memo

Cash Memo is also a non-negotiable commercial instrument indicating, the cash
has been received from the purchaser for the goods sold to him. It works as a
proof of cash payment made. When the cash is received for the sold goods, no
debit is raised against it. The cash memo contains the following description:
Date
Serial Number
Name and address of supplier
Name and address of buyer
Unit price of goods
Quantity
Discount (if any, both for trade and cash discount)
Tax (VAT or Service tax as the case may be)
Total Amount Received

 Signature of the cashier.

Key Differences Between Invoice and Cash Memo

1. An instrument indicating the payment due against any goods sold or
services rendered is invoice. Conversely, an instrument indicating cash
payment made for the merchandise is known as a cash memo.
2. An Invoice is raised prior to the payment while cash memo is raised when
the payment is done.
3. An Invoice is issued for the credit transaction as a proof of amount due,
whereas cash memo is issued for cash transaction as a proof of the amount
received.
4. Signature of seller or his agent is there in the invoice. On the other hand
signature of cashier is found in the cash memo

Similarities
Non-negotiable commercial document.
Raised by the supplier of goods or services.
Sent to the purchaser or receiver of goods or services.

Conclusion
Invoice and Cash Memo both are business voucher raised at different events. An
Invoice can be sales invoice from sellers perception and purchase invoice from a
buyers perception. With the help of invoice the seller can easily locate the
payment on which invoices are made and which are still due.
On the other hand, Cash Memo is the proof of the amount paid by the buyer. The
seller retains a copy for future reference
-------------

Difference Between Invoice and Receipt

January 17, 2015 By Surbhi S Leave a Comment

There are a lot of complications in understanding the difference between invoice

and receipt. The persons who engage in trading activities knows them,
undoubtedly, but the person related to non-trading activities may have to go with
severe perplexity to interpret the two terms. Here with the help of this article, the
major difference between invoice and voucher has been discussed for the full
apprehension of the two entities.

Content: Invoice Vs Receipt

1. Comparison Chart
2. Definition
3. Key Differences
4. Similarities
5. Conclusion

Comparison Chart

BASIS OF
COMPARISON

INVOICE

RECEIPT

Meaning

An invoice is a commercial
document issued by the vendor to
the purchaser to request payment

A receipt is a document issued by

the vendor to the purchaser after
the final payment is done.

Time of Issue

Before the payment.

After the payment.

Importance

To record the details of the

merchandise sold, but the payment
is yet due against it.

To act as an evidence that the

payment for merchandise bought
has been done.

Details

Quantity, unit price, invoice

number, discount, taxes and total
due.

Quantity, unit price, receipt

number, discount, taxes, the total
amount paid and mode of payment.

Definition of Invoice
An invoice is an acknowledgement issued by the vendor to the purchaser of goods
or services to request for the payment of goods sold or services rendered by him.
It is a non-negotiable legal document which identifies the buyer and seller of the
stuff. It contains details regarding quantity, price, discount, taxes, the total
amount due for the payment, invoice number, date of issue of invoice and the
sellers signature. The instrument is delivered prior to the payment of the goods
for indicating the amount due against the merchandise.

Definition of Receipt
A receipt is a legal commercial instrument used for indicating that some goods or
services of value have been received. It is issued by the vendor to the purchaser to
act as a proof that payment has been made. The receipt is generally issued
subsequent to the payment of the stuff. The document contains details of buyer
and commodity like quantity, price, taxes, discounts, mode and date of payment,

total amount paid, receipt number and signature of the seller or his authorized
agent.

Key Differences Between Invoice and Receipt

1. An Invoice is a request for payment and receipt is a confirmation of
payment.
2. The major difference between the two is that the invoice is issued prior to
the payment while the receipt is issued subsequent to the payment.
3. The invoice is used to track the sale of goods or services. On the contrary,
receipt acts as a documentation for buyer that the amount for the
merchandise has been paid.
4. The invoice indicates the total amount due whereas the receipt indicates
the total amount paid along with the mode of payment.

Similarities
Both are commercial documents.
Both are a part of the purchase cycle.
Both contain details about buyer and seller.
Both are legally non-negotiable instrument.

Conclusion
Invoice and Receipt both are a prominent part of the purchase cycle. The invoice
helps the seller to keep the record of sale and to determine that amount of
merchandise has been received or not. The buyer can also track and match the
details of goods or services listed on the invoice are received. The receipt can help
the buyers to track payments for the stuff and sellers can also identify that
amount on which invoices is received and which ones are still outstanding

-----------

Difference Between Tax Invoice and Retail

Invoice
February 17, 2015 By Surbhi S 2 Comments

In general, there are two types of invoices tax and retail. We have compiled
their differences and comparisons along with their proper definition. Have a look
on it.

Content: Tax Invoice Vs Retail Invoice

1. Comparison Chart
2. Definition
3. Key Differences
4. Similarities
5. Conclusion

Comparison Chart

BASIS OF
COMPARISON

TAX INVOICE

RETAIL INVOICE

Meaning

A tax invoice is an invoice issued

by a registered dealer to the
purchaser, showing the amount of
tax payable.

A retail invoice is an invoice issued

by the seller to the buyer for the
amount due against the goods sold
to him.

Objective

Availing an input tax credit

Request for Payment

Issued when

Goods are sold with the purpose of

resale.

Goods are sold to the ultimate

consumer.

Tax Identification
Number

Yes

No

Definition of Tax Invoice

A legal document issued by a registered dealer (seller) on the event of a sale, to
another registered dealer (purchaser), who is not the consumer, is known as a tax
invoice. The invoice should be created in triplicate i.e. original for the buyer and
the rest two are retained by the seller.
Tax invoice plays a significant role in any countrys tax system as the dealers issue
invoices, for recognizing a transaction. At the end of the financial year, they had
to submit the details of these invoices to the relevant tax authorities. So, this is an
important tool used by the government to avoid tax evasion.

A typical tax invoice looks like the image given above. The tax invoice may consist
of the following details:
Invoice Number
Date of issue of invoice.
Name and address of the seller
Name and Address of the buyer
Tax Identification Number (TIN)
Quantity
Unit Price

 Total Amount
Tax Charged
Signature of authorized signatory

Definition of Retail Invoice

A commercial instrument issued by the seller to the purchaser i.e. end user of the
goods, is known as Retail Invoice. Generally, the invoice is created in duplicate,
i.e. original for buyer and dupicate for the seller. It is used to request for payment
from the buyer. Retail invoice can also be issued on account of interstate sales or
sale to an unregistered dealer.

A typical retail invoice may look like the image given above. You can find the
following details on the retail invoice:
Invoice Number
Date of issue of invoice
Details of buyer
Details of seller
Quantity
Unit Price
Total Amount
Discount (if any)
Signature of seller or his authorized agent

Key Differences Between Tax Invoice and Retail Invoice

1. When goods are sold with the purpose of resale tax invoice is issued,
where as when the goods are sold to the final consumer retail invoice is
issued.
2. Tax invoice is capable of availing input tax credit (credit on inputs, i.e. tax
already paid at the time of purchase) as opposed to retail invoice which is
not capable of availing input tax credit.
3. In case of goods sold to unregistered dealers within the state Retail Invoice
is issued not the tax invoice.

4. Tax invoice contains a TIN number, but Retail invoice dont.

Similarities
Non Negotiable Instruments
Shows Amount Payable
Description of buyer and seller

Conclusion
It is the duty of every registered dealer to issue tax invoices at the time of sales.
Here Registered dealer means the dealer who is registered under any tax Act
while if the dealer is not registered then retail invoice is issued to / by him
------------

Difference Between Sales and Marketing

November 5, 2014 By Surbhi S Leave a Comment

Everyone is aware of buying and selling things, in fact, there is hardly anyone in
this world who never purchased anything. These purchasing and selling of goods
and services involves many activities in it such as creating, promoting,
disseminating, delivering and exchanging through money or moneys worth. It is
concerned with the two major terms which are Sales and Marketing.
Both of the two are so closely interrelated that their difference is not seen in
general way, however both of them are different from each other. Now lets
understand the difference between Sales and Marketing.

Contents: Sales Vs Marketing

1. Comparison Chart

2. Definition
3. Key Differences
4. Similarities
5. Conclusion

Comparison Chart
BASIS OF
COMPARISON

SALES

MARKETING

Meaning

The act of transfer of ownership

of a product from manufacturer to
the ultimate customer in exchange
of money or any other
consideration is known as Sales.

Marketing is understanding the

requirements of the customers in
such a way that whenever any
product is introduced according to
their requirement, it sells itself.

Term

Short term

Long Term

Scope

One product is created to satisfy

the requirement of a customer.

Advertisement, Sales, Research,

Customer satisfaction, After sales
services etc.

Relationship

One To One

One to Many

Activity related to

Persons

Media

Definition of Sales
Sales are considered as the act of transfer of possession of a product from
manufacturer to distributor, distributor to wholesaler, wholesaler to retailer and
from retailer to the ultimate consumer in exchange of money or any other similar
consideration, for the purpose of increasing revenue. It is the beginning of the
contract between the vendor and the customer.

For promoting sales normally special prices or discount offers are used by the
entities for attracting customers towards the product. There are many activities
involved in generating sales, which are Demonstrating product.
Establishing Tie-ups.
Satisfying Customer needs.
Building Contacts.
Using E-commerce strategy.

Definition of Marketing
Marketing is made from the term market, which means to analyse and figure
out the needs of the customer so that the company will produce the products
according to the requirement of the customer. It looks after their new metrics to
know about the interest of the customer or group. It involves the dissemination of
the value of product to the customer so that its sales will increase along with the
brand reputation.
For increasing the market of any product normally special offers are introduced
to attract customers. The activities involved in marketing are Research of market
Creation of product
Promotion of product
Advertisement of Product

 Communicating the value of the Product

Selling of the product
After Sales Services
Customer Satisfaction

Key Differences Between Sales and Marketing

1. Sales is the transfer of ownership of product from one person to another
for some value, whereas Marketing is the act of analysing the market and
understanding the needs of customers in such a way that whenever a
product is launched as per their needs, it will sell itself.
2. Sales are one to one relationship while marketing is one to many
relationship.
3. Sales are a short term process while marketing is a long term process.
4. Sales is basically human driven on the other hand, marketing is media
driven.
5. Sales focuses on the individual, i.e. directly interacting to persuade them to
purchase the product, but marketing focuses on the general public, i.e.
creating the value of product to increase sales.
6. Sales uses push strategy while marketing uses pull strategy.

Similarities
For running any business marketing and selling of a product is must because
without proper sales any business can be failed. Both of the terms are converging
at some points like the main purpose of the two is increasing revenue and
therefore they both help business to survive in the long run.

In one hand Sales focuses on individual customers for the selling of a product,
which requires sales personnel and on the other hand, marketing creates a proper
market for the product to achieve the required sales volume or we can say that
the last step for marketing is sales which requires a good marketing team. In this
way both the terms are somewhere interlinked very closely.

Conclusion
As we have already discussed that the two terms Sales and Marketing are not
contradictory in nature, but they are interconnected however there are many
differences between them. Both of these play a very important role in running
any business, neglecting any one can severely affect the whole business.
Sales is a human oriented function so the personnel involved in the sales activity
should be given proper training and incentives to increase sales. On the other
hand, Marketing is a media oriented so best channels for promoting and
advertising the product should be procured to raise demand for product and
brand reputation
---------