What are debit notes?
Debit notes serve the purpose of the receipts or invoices used in businesses. They are promissory notes that are issued to one party by another party. The party issuing the debit note is usually the seller while the other party is the buyer.
It indicates the amount of money that is owned by a person. When a seller wants to request for the credit note, the debit note in the form of promissory note is issued by him. In other words, issuing the debit notes is a formal way to request for the money by the seller.
Some sellers also issue the debit notes after issuing the invoice. When the wrong amount of money is recorded in the invoice, the debit note is sent to make the adjustment.
When is the debit note issued?
There are different situations in which issuing the debit note works. Some of them are:
- If one party charges the wrong amount of money i.e. it can be in excess or also less
- If the invoice was sent earlier but some important details were missed
- The total quantity of the goods being sold is described by the seller to the buyer through the use of debit note
- In order to remind the buyer of overdue payment, debit notes are used
Although there is a big difference between invoice and debit notes, the seller can use the debit note in place of the invoice when he wants to make an adjustment in the amount owed by the buyer.
No matter which purpose you want to use debit notes, it is always important for you to know about the format of debit notes.
In order to carry out business to business transactions on daily basis, debit notes are used. Some companies also use debit notes for extending the credit.
What is the format of debit notes?
In every business, you are needed to know about the debit notes format so that you can prepare one with a professional approach. Here is the format
- The title of the debit note is given at the top.
- The name of the debit note recipient, date of issuing the debit note, unique debit note number are written after the title
- The details of money claim are given in the body
- The reason of issuing the debit note is also mentioned in the debit note
- The total amount is mentioned
- The details of the company or the individual who is sending the debit note are also provided
- Shipment details of goods such as total shipment charges are also provided
- The amount of tax on the transaction is mentioned
- Total and subtotal amount to be paid is also specified
- Mention the quantity of each good being sold
The recipient should be asked to confirm the amount that has been given in the debit note. This will enable you to conduct the transaction as soon as possible. You can ask the recipient to pay you as soon as possible.
See also: Debit note templates
See also: Debit memo templates
See also: Debit note rejection letter
MS Word [.docx] | Download
MS Word [.docx] | Download