When making sale and purchase transaction, payment proof is inseparable. This is given at the end of transaction as proof of the transaction made between people, companies, or other parties.
There are many types of payment proof and they are customized based on the transaction made. Moreover, the functions are varied and adjusted with the type of transaction. We will discuss more thoroughly on the definition, classification and examples of payment proof that you need to know below.
Definition and the importance of payment proof
Generally, payment proof can be defined as payment tool that serve as a proof of transaction occurrence between a buyer and a seller. The transaction can be any kinds of transaction. However, these transactions have the same essence, which is transferring a number of money or goods from an individual to another individual (Generally from seller to buyer or the other way around).
Proof of transaction is highly crucial and it cannot be eliminated because it has many functions related with financial report. The followings are important factors on payment proof that you need to know.
According to accounting field, a transaction shall be deemed invalid if there is no transaction proof. Therefore, every person is advised to ask for receipt as a proof of transaction, whether for small, medium, or large scale transaction.
Transaction proof also plays an important role in supporting business actors in facing financial auditor. In this case, transaction proof will make it easier to check and crosscheck the match between the written financial transaction and the transaction proof owned by the company. Usually this situation is faced by businessmen when they are trying to find investors for capital increase.
If at any time they require transaction proof, this is also very important to do a crosscheck. Usually people will request that at any time when they wish to do a crosscheck for goods purchase. For example, the purchase of a smartphone for office operational need.
Types of payment proof and the functions
Discussing on payment proof, there are many types of transaction proof and its functions. Transaction proofs are classified based on the functions.
Receipt is transaction proof used to mark out that there is a receipt of an amount of money. Later on, receipt will be signed by the person accepting money and give it to the person making the payment. Receipt has 2 parts, the first part shall be given to the person making the payment and the second part shall be used as recoding proof of the money that have been received.
The document created and given by the seller to the buyer. There are 2 parts of cash note. The first part shall be given to the buyer, and the second part shall be kept by the seller as transaction proof.
Invoice is a written statement on the goods being sold, such as the number of item and the price. Invoice is issued by the seller to the buyer. Afterwards, invoice will be used by the buyer to check on the items that will be purchased. Invoice is categorized into 2 types, purchase and sale invoice.
- Credit Note
Proof of transaction on the return of sold goods and is kept by the seller. Credit note serves as an agreement between the seller for the request of price reduce by the buyer in the case that the goods is damaged.
- Debit Note
Transaction document stating request to reduce price to the seller on information of item return that does not meet expectation.
A check is a payment order issued by a person who has an account in a bank so that the bank can pay an amount of money based on the amount stated by the check issuer.
Those are the transaction proofs that we often encounter in our daily life. Today, transaction proof has shifted its form from paper to digital payment proof. This is in line with the development of era that demands for convenience and practicality in every transaction.
This convenience san also be seen with the emergence of Paper.id that offers easy-to-use invoice software. Paper.id is also equipped with other features such as receipt printing, inventory financial report, and chart of account. Use the software and enjoy the convenience in every transaction you make!