One chain, four documents
The quotation states the price and terms you offer. The sales order records what the customer accepted, with quantities and delivery. The invoice bills what was actually delivered. The payment closes it. Each step should refer to the one before, so you can start from any document and walk back to the beginning.
Keep the numbers in each series in order. A gap in the quotation numbers shows a lost offer, and a gap in the invoice numbers needs an explanation. Gaps are easy to see when numbers run in sequence and very hard to see when they do not.
Say whether the price includes VAT
The most common quotation dispute in a VAT market is simple: one side thought the price included VAT and the other thought it did not. Print the net price, the VAT at 10% and the total on every quotation, in dinars to three decimals, so nobody has to guess.
Show the same split on the sales order and carry it unchanged to the invoice. If a line is zero-rated or treated differently, say so on the line. Which supplies are zero-rated is for the NBR to confirm, so check with the NBR or your accountant before you promise a customer a particular treatment.
Credit customers and what they owe
Most wholesale sales are on credit, so the real question each morning is who owes what and since when. Keep a balance for each customer, built from invoices less payments and credit notes, and agree the payment terms in writing before the first order.
- A list of unpaid invoices by customer, oldest first.
- The agreed payment terms printed on the quotation and the invoice.
- A note of each promise to pay, with the date and the person who made it.
- A review before each new large order from a customer who is already late.
Purchase orders to suppliers
A purchase order is your side of the chain. It tells the supplier what you want, at what price and by when, and later it is the document you check the supplier invoice against. Many traders around Manama and Hidd buy from several suppliers at once, so the habit of one numbered order per purchase saves a lot of phone calls.
When the goods arrive, compare them with the order before you accept the supplier invoice. Differences in quantity, price or VAT are far easier to settle on the day than a month later.
Where TAQNIX ERP fits
TAQNIX ERP runs on a Mac and opens in the browser. It handles quotations, sales orders, purchase orders, invoices and credit notes with sequential numbers and 10% VAT per line, payment tracking and what each customer owes, in Arabic and English, in dinars.
It does not file VAT returns and it is not an accredited e-invoicing provider. It keeps the chain of documents in one place so that you and your accountant can follow it.
General information, not legal or tax advice. Confirm rules with the authority or your accountant.
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