An order form is a document written by the provider summarising the product or services bought by the purchaser. The latter have to then examine and authorize the order form to cause distribution and possibly release an invoice for the BtoB. The function of the order is to confirm the acquisition of the goods and services bought and to detail the terms of the exchange. The order form can be made by mail, fax or email.
What info are consisted of on a purchase order?
The order form have to contain mandatory information such as:
- the note “Order form” on the paper day and order number
- delivery day and conditions
- the full identity of the supplier (address of the head office, firm name of the distributor)
- the complete identification of the client (SIRET number, business name, and so on) and the payment address
- the quantity and information of the goods or solutions gotten
- the rate excluding taxes and all tax obligations included
- the VAT amount
- settlement terms
- the problems and withdrawal durations
- information pertaining to the problems of sale (settlement method, distribution conditions).
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Why making use of and order form?
Companies use the order form first of all to have legal security. Undoubtedly, the order stands for a legal contract in between the seller and the customer, it permits the assurance of sale to be confirmed. In the event of difference over the quantity of items, for instance, the order form acts as a reference.
Secondly, the order makes it less complicated to track orders. It enables, thanks to the purchase order number, to much better visualise and handle the goods and services that have been bought.
Furthermore, the order form aids to stay clear of audit problems. Consequently, throughout a tax audit, the treatments are less complex and faster.
Ultimately, the purchase order promotes monitoring for suppliers and makes maneuvers quicker, the info being all in the same location the provider sends orders quicker.
When does the business need to provide an order form?
For higher efficiency, companies will set a minimum ceiling for issuing purchase orders. On top of that, some repayments do not call for purchase orders such as:
- regular and repeating purchases connected to the day-to-day tasks of the business, consisting of heating, electricity and gas as an example.
- repayments for interior costs (interior tools, products, enjoyment). They are normally called “expense compensation”
- purchases where the overall future price is unknown, a billing will certainly suffice.
Difference in between order form and billing?
The main difference in between an order and an invoice is that the purchase order allows you to specify exactly the things ordered by the customer as well as the terms connected to shipment and buying. This file acts as a contract in between the customer and the seller.
While the invoice is a legal and accounting document which certifies the acquisition or sale of goods or solutions. The purchase order number will usually appear on the invoice to guarantee that the info in both records are identical.