Enquiry from Intending Buyer, Providing Quotation to the Intending Buyers and Rectification of Errors (For CBSE, ICSE, IAS, NET, NRA 2022)

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In the market, normally we move from one shop to another, enquire about the prices, compare the quality of goods and finally decide to buy the goods of our choice. But it is not so easy to buy from those producers and traders whose production centres or trade centres are situated at far off places. A procedure has to be adopted by the buyer as well as the seller and the transaction passes through various stages before it is finally concluded. In this section we shall study about the various stages involved in the process of buying and selling of goods within the geographical boundaries of a country.

The usual procedure for selling goods, known as Selling Routine, which involves the following steps:

Selling Procedure

Enquiry from the Intending Buyer

The process of sale starts with an inquiry by the intending buyer from the best available seller in terms of supply, price and quality of goods. This enquiry can be made from the secondary sources like advertisements, in newspapers, market reports, catalogues, price lists, etc. However, an enquiry normally refers to collecting information directly from the seller or the manufacturer so as to decide the best source of supply. Big business houses where regular purchases are made have printed enquiry forms.

Providing Quotation to the Intending Buyers

On receipt of an enquiry from the prospective buyer, the seller provides the required information known as quotation. The terms and conditions of sale as well as the price mentioned in the quotation from the seller՚s side are open for further negotiation. Sellers also use printed quotation forms.

Receipt of Order from the Buyer

When the prospective buyer is satisfied with the terms and conditions of sale mentioned in the quotation, he issues a formal order to the seller for supply of goods. Order forms are sometimes printed by the buyer.

Execution of the Order

On receiving the order, the seller usually acknowledges it and confirms its acceptance. If the order is executed at once then no confirmation is required. The order is then stamped with date of receipt, assigned a reference number and entered into the Order Received Register. If the order is from a new customer then the seller may verify the credit worthiness and/or financial status of the buyer.


An invoice contains details of the transaction and the amount to be received by the seller from the buyer. The seller sends the invoice along with the supply of goods to the buyer. A copy of the invoice is also retained by the seller. A copy each is sent to the production department or godown and the accounts department.

Opening Customer՚s Account

When the copy of invoice is received by the accounts department, an account is opened in the ledger in the name of the customer. This account keeps a record of the invoice price of goods sold, credit allowed to the customers and payments made by him. If there already exists an account then necessary entries are made therein.

Dispatch of the Goods

For release of the goods the godown or the production department requires a copy of the invoice or a delivery note from the accounts department, or both. Goods released are taken over by the packaging department where there is a final check that all goods are in accordance with the order. Then the goods are labelled and sent to the dispatch section. When the goods are dispatched a copy of the dispatch note is forwarded to the buyer. This note is also known as advice note or letter of advice, which contains full description of the goods dispatched.

Delivery of Goods to the Buyer

After receiving the railway receipt or transport receipt from the seller, the buyer takes delivery of goods from the railway or transport authority. While taking delivery the buyer or his agent must check the goods thoroughly. If the goods are damaged, he must inform the transport authority and a claim for the damage seeking compensation should be made immediately.

Receipt of Payment and Settlement of Accounts

The last step in the process is the receipt of the payment for goods sold. Payment is made according to the conditions agreed upon earlier. In inland trade, payment is generally made by means of money order, cheque, bank draft, bill of exchange, promissory note, etc. In case of regular customers, all outstanding dues are taken together and the customer is required to pay at regular intervals rather than on transaction basis. If full payment is received the account is said to be settled. Remittances received are duly acknowledged and sometimes the sellers also issue periodic statements of account. It shows the following items:

  • The date of sale
  • The amount of goods sold
  • Payment received from the buyer
  • Balance due from the buyer

Rectification of Errors

You have studied so far that the business transaction begins with the buyer՚s enquiry about the goods to be purchased and completes when he finally settles his account with the seller. Even though the seller is very careful while sending goods and preparing invoice, there might be certain errors. These errors can be rectified by preparing Credit note or Debit note. Let us know about these two notes in detail.

Credit Note

A document, which informs the buyer that his account has been credited with a particular amount.

Debit Note

A document, which informs the buyer that his account has been debited with a particular amount.

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