In accounting, there are a variety of documents, among which you can come across such a thing as advice notes. Is this an official document or just a reporting paper? Consider this issue in this article, and also find out what types of advice notes are.
The concept
A memo is one of the most important documents in accounting, which is an official paper that proves the conduct of a particular banking operation. In fact, this can be called an invoice that confirms a bank transfer or proves its refusal.
From Italian, avviso can be translated verbatim as "notice."
Aviso in the bay. accounting
A memo is a document that can be applied both in the business sphere and in accounting. These can be copies of a payment order, a memorial order and other settlement documents.
This document is an official notice showing the performance of a settlement or commodity operation. He is sent from one side to the other. In this way, financial institutions report a debit or credit account entry, account balances, a receipt, a letter of credit, a payment for a transfer, etc.
Business practice implies such notifications so that the parties inform each other about the actions taken with the goods and other values.
A memo in accounting is a document drawn up on a special form where the number, date, operation to be performed, amount, account number, sender and addressee must be indicated.
Methods of sending a document are:
- postal;
- electronic (must be certified with a digital signature).
In the banking sector, they often use such a notice confirming the inter-branch turnover of funds. Such a document is necessary if the company has independent enterprises. The notice in this case can confirm and summarize the results for the overall budget of the entire organization.
There are such types of advice notes as:
- debit (debit order);
- credit (order for crediting funds).
According to the workflow method, the payment advice notes are distinguished:
- direct (notification that does not require an answer);
- the opposite (a document that confirms the completion of a financial transaction).
Accounting debit memo
A debit memo is an official document that contains information that the addressee owes a certain amount of money to the organization sending this notification. The amount must be stated in the document.
It is worth saying that such a document is issued very rarely. Increasingly, accountants issue invoices.
But still there are situations when you need to make a debit memo. For example, if we are talking about sending a document inside the company that does not confirm the sale of services or goods (here you cannot use an invoice).
Also, this type of notification must be used without fail, when it comes to international transactions. This is because the document involves an order of foreign trade operations, which is carried out taking into account the established form.
Organizations can sometimes use consolidated memos from multiple debit documents to optimize settlement transactions.
A debit notice is issued on established forms that contain the following details:
- Number and date of discharge.
- Account number and amount.
- What operation is performed.
- Name of the sender and his details.
- Name of the addressee and his details.
- Additional Information.
A memo is a document requiring the completion of a financial transaction, therefore it must be sent:
- in duplicate, when one of them remains with the company in arrears of funds, and the second is sent back to the sender after stamps and signatures are affixed;
- in triplicate, when the calculations are carried out within the same company.
Credit Memo
In addition to debit, in the accounting dictionary you can find the concept of "credit memo". What is it and what are its features?
The document to be agreed shall contain the following instructions:
- What checks were accepted for payment;
- what is the total amount of checks;
- how long the payment was accepted;
- customer's signature.
A credit memo is a document that confirms the presence and size of a company's debt to a customer. That is, when the goods are delivered to the customer, an invoice is issued. If the customer returns all the goods or part to the supplier, the invoice must be completely or partially canceled by credit notice.