- slide 1 of 3
Source documents detail the particulars of transactions that include the date, name, address, terms, and product description among other relevant pieces of information. Types of source documents include cash receipts, canceled checks, invoices and timesheets. Source documents may be paper-based business forms or electronic documents and are used for initial input to the accounting system.
They also serve as evidence that a transaction took place and is part of the audit trail for as long as those documents are required to be kept by law or policy. Of such, they are a part of the record keeping process.
- slide 2 of 3
Source Documents & Uses
Quotation – This is an agreement, usually written, from a producer to a potential customer to sell goods or services at a particular price and quantity. The quotation may include the cost to produce, deliver and finance the purchase.
Purchase Order – This is a written order giving the authorization to purchase goods or services from a supplier.
Sales Order – A sales order (SO) is an internal document that is generated from a customer's purchase order. This document is generated to create an audit trail/control to be used to monitor the entire sales process using the company’s internal numbering system instead of relying on the customer's purchase order, and the numbering system that it is based on.
Credit Note – This document is sent by a supplier to a customer to reduce the liability of the customer. In essence it is a negative invoice that is issued when goods are returned, when there was an overpayment, or when some other event has occurred that has the effect of reducing the amount that the customer owes to the supplier.
Debit Note – This document is sent from a customer to a supplier to request a credit note in respect to an overpayment or return of goods.
Invoice – This document is sent to request payment for monies owed, for goods that were delivered, or services that were rendered.
Receipt – A written document that confirms that money has been received as a down payment, account settlement or installment.
Goods Receipt Note – Outlines the list of goods that were received from a supplier.
Goods Dispatch Note – Outlines the list of goods that were sent to a customer; also known as a packing slip.
- slide 3 of 3
Source documents are an important part of the accounting process, and indeed the audit trail. Not only are they proof that a transaction actually occurred, but they are also use to input data into the general accounting system. In addition to those we discussed above, the various types of source documents include any written or electronic proof that a transaction or business event occurred.
Image Credit - Documents (MorgueFile)