There are some situations in which the buyer or a company sends money to the supplier with the purchase order even if there is no delivery of the goods or sales invoice. This is a very common process these days and companies use it to remove any complications and late payments to the vendors so that they can claim to have the delivery of their ordered goods on time. When a person sends money or check to a supplier, the supplier doesn’t attach the money with any invoice as there is no invoice before sending the delivery but keeps the check or money aside to be attached with the sales invoice later but still gives credit to the buyer for the money he has paid to the vendor. The receipt that the supplier gives to the buyer for the credit for the check he sent to the supplier is known as the receipt-on-account for goods to be delivered.
Importance of Receipt on Account for Goods to be Delivered:
Usually when a buyer places an order with a supplier or vendor, they both agree that the payment for the order will be send to the supplier after the goods are delivered to the buyer or at least after the buyer receive a sales invoice to calculate exactly the amount of money to transfer to the supplier. But, there are many companies and buyers that trust their suppliers and deposit the money for the order before receiving the goods or sales invoice. As there is no sales invoice, the supplier who receives the money, enters it in credit account without attaching any invoice with the check or deposit receipt. In return, the person who receives the money gives a receipt to the buyer as a record that the supplier has received the money and entered it in the credit account of the buyer. Once the order is delivered to the buyer and sales invoice is issued, they supplier evaluates if the credited money will cover the invoice or the buyer has to send more money to the supplier.
Key Elements to Include in Receipt on Account for Goods to be Delivered:
- Name of the creditor (the buyer or the person who sent the money for an order)
- The name of the company who sent the money
- The name of the person who received the money
- The name of the company (supplier) who received the money
- Details of the money received by the vendor (either it’s check or cash or account deposit)
- Details of the order against which the money was received (goods or items to be delivered)
- Date when the goods will be delivered to the buyer
- Reference number of the receipt given to the buyer against the money he deposited for the supplier
- Signature of the accountant or any other employee who is authorized to receive and enter the money in record
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