Proof of Transaction: Definition, Purpose, Benefits, Types, and Kinds

Proof of Transaction

What is Proof of Transaction? Definition, Purpose, Benefits, Types, and Kinds

A transaction, such as a purchase, sale, and others, needs documents. This document is known as a proof of transaction.

The function of these documents in a company is essential. Whether outgoing or incoming, every transaction must be recorded in the report and accompanied by valid evidence.

For daily activities, such as shopping, paying children’s tuition fees, paying dues, and so on, you often get a piece of paper. The paper indicates that the payment has been made and is valid.

However, at the time of digitalization today, proof of transactions no longer has to be on paper. Sophisticated payment systems have been able to make proof of payment in the form of softcopy.

Officers send it via email or WhatsApp message. Although the form is in the form of a soft file, the proof of the transaction is valid and can strengthen the occurrence of transactions from both parties.

Definition of Proof of Transaction

Definition of Proof of Transaction

The definition of proof of transaction is a record in the form of hardcopy or softcopy that states the occurrence of a transaction. The evidence is valid if both parties acknowledge it.

In hardcopy form, proof of transaction is usually signed as a sign that it has been checked and is correct. But in softcopy, no. The recipient must review and confirm as a sign of agreement with the contents.

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Proof of Transaction Benefits

Have you ever seen someone making payment, even if it was only a small amount asking for documents? It doesn’t matter how much money has been spent but as a guarantee that the transaction is recognized.

In a company, this evidence is significant. When an inventory of transactions and journaling is carried out, everything must have documentation. The benefits of proof of transactions are not only for the money giver.

For the paying party, this document indicates that the beneficiary party has acknowledged the payment. The receiving party can no longer do the billing.

As for the recipient, the role of this document is no less critical. Apart from being proof that the transaction has taken place, it also prevents billing from happening again to the client.

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Purpose of Proof of Transaction

Proof of transactions in a company as an attachment document in journalizing. The goal is to prevent wrong transactions and minimize fraud. Therefore it must be stored neatly and efficiently retrieved.

Who Issued Transaction Documents

Documents in the form of proof of transactions are issued by officers who receive money or goods accompanied by ratification. The attestation can be in the form of a signature or company stamp.

Functions of Transaction Documents in a Company

Functions of Transaction Documents in a Company

As an institution consisting of many people, all business activities must be documented to facilitate monitoring. Especially about finances.

Transaction proof documents are important files that must be present. Even without these documents, a transaction may be deemed not to have occurred, and the company is under no obligation to replace it.

The company recognizes various types of transaction evidence. All functions are the same, namely as a tool for recording and billing the company’s obligations. Its functions are:

  • Tools to make it easier to confirm
  • Knowing who was involved in the transaction
  • Official records relating to the availability of capital, payables, receivables and other liabilities of the company
  • Avoid double entry and billing
  • Reducing errors by officers due to the absence of documents for checking

Type of Proof of Transaction

There are two types of proof of transactions. Both are different from the side of the receiver and sender. However, its use and function are the same, namely as a registered document to certify transactions.

These documents are evidence of internal and external transactions. The difference between the two is who the recipient is. This evidence is so vital that it must be stored neatly.

Proof of internal transactions is a document issued by the finance or payment department to the company’s internal parties, for example, employees or leaders.

This type usually states that the company has paid salaries, overtime incentives, etc. The destination has also been received. If you want to complain, you must bring proof of the transaction.

Meanwhile, for the second type, external transaction evidence is in transaction documents with parties outside the company. For example, paying taxes, renting buildings, purchasing production materials, etc.

The payment or finance department must keep a duplicate external proof of purchase. The point is evidence if there are parties who complain, complementary documents in journals and financial records.

The transaction document function is essential. Therefore, usually, companies will keep documents from previous years neatly. Periodically, the company will do document cleaning.

For this process, management approval must be carried out, and certain documents must be carried out. For example, after the transaction occurred so many years. The party who will carry out the extermination must make a request and approval.

After the destruction process is carried out, an official report must be made immediately stating the date, location, and data of the files that were destroyed—for example, payment documents from so many numbers to so many.

This report aims to prove that essential documents for the company are no longer there due to the destruction process. Not caused lost or tucked away.

With this evidence, the finance department will not be blamed if it turns out that the document is needed one day again. The absence of such evidence cannot be disputed based on the minutes.

Form of Proof of Transaction

Form of Proof of Transaction

There are many kinds of transaction evidence. So important is this document that even companies are willing to invest large sums in purchasing the recording, creation, and storage software.

Currently, many companies no longer use hardcopy for employee salary receipts. The file has been replaced with a soft file sent directly via email or a delivery application such as WhatsApp.

Even without a signature or stamp as an endorsement, the validity of this proof of purchase is not in doubt. Usually, at the top or bottom of the document is a statement that the evidence is official.

The recipient must agree. If there is an error, then when filing a complaint, the evidence can be helpful as a tool. You can do this by the printing or showing only the softcopy.

After understanding the benefits, functions, and purposes of proof of transactions, what are the types? Each company applies different styles and functions. But in general, the following include:

1. Note

This type of transaction evidence is often used in buying and selling transactions. Large-scale shops and even stalls around the house also often use it as evidence of purchase and selling.

In the memorandum, written information regarding the transaction date, the type of goods purchased, the amount, unit price, and others. Everything is written in it if the seller gives a discount or discount.

The lowest number written is the total transaction that the buyer must pay. This proof is significant when buying goods at a store that serves returns or returns.

If the buyer feels that the purchased item is uncomfortable and wants to return it, the note must be shown. Therefore, proof of transactions in notes must be stored properly.

Usually, the shop will make it in two files. The first file is submitted to the buyer. At the same time, the second file is stored in the store. This document is essential when doing a checking stock.

2. Receipt

This second proof is used when a cash payment occurs. Receipts are usually in the form of long paper. The receiving department will put a signature and the date of the transaction. Sometimes, in addition, they are stamped.

In the receipt file there is quite complete information. Thus it is easy to check. What information is written on the receipt? Here are some of them:

  • Transaction date
  • Amount of money
  • Recipient’s signature
  • Signature submitting payment
  • Name of the payee

3. Debit Note

Debit notes are usually issued by the recipient of the goods or who submits a certain amount of money. This proof is commonly used when an error occurs in a transaction. For example, the price or the number of goods received.

From the party submitting it, the function of this note is to straighten the transaction so that its rights can be accepted. As for the party who issued the goods, this note is a tool to check cash opname.

Debit notes are so important that both parties must understand their function. It is not uncommon if a human error causes a transaction error, the recipient of the money asks the payer.

The point is proof of submission to the warehouse or finance department. Debit notes are not a tool to knock each other down but a way to cross-check together.

4. Credit Note

This type of note is a form of follow-up to the existence of a debit note. The officer will submit a credit note so that the finance department will reduce the price and return the overpayment.

Meanwhile, the warehouse department will follow up by processing the release of goods according to the shortage. These notes are also evident in the reporting of transactions that have occurred.

5. Sales Invoice

Sales invoices are official proof that an item has been purchased. In a company, sales invoices are important as evidence in recapitulating receivables related to the company’s assets.

This document is proof of a transaction in that the company has added assets or wealth by purchasing an item. This is undoubtedly related to the significant reduction in cash flow in the finance department. The contents are:

  • Transaction date
  • Company name
  • Number of items purchased
  • United or total price, including discount if any
  • Data of companies that make sales and purchases
  • TIN
  • VAT

6. Purchase Invoice

Proof of purchase of this type states that there has been a purchase transaction of goods. It can also be a service. The invoice contains complete information about the transaction. Usually contains:

  • The name of the company from which the goods or services are purchased
  • Transaction number
  • Details of transaction
  • Price
  • A stamp certifying the transaction
  • Method of payment. cash or tempo, if the tempo is how long and how much is the installment

7. Tax Invoice

In particular, buying and selling transactions, for example, property and taxes, must be paid. A tax invoice is proof of submitting a sum of money to the Directorate General of Taxes DGT.

The proof of purchase file is significant when auditing both internally and externally. Besides that, it is also proof of reporting to the tax office that the company has fulfilled its obligations by applicable regulations.

8. Check

Checks are securities containing payment orders from the party issuing the money to another party. This paper is proof of official payment involving the bank as a payment intermediary.

In making transactions or disbursing money via check, the bank will verify. The point is to prove that the document contains money and can be disbursed or accepted. There are two types, namely:

  • Aan Order
    This first type is known as a check on behalf. In this type of check, there is a name entitled to receive funds. The officer will check that the customer who comes and takes cash is as stated in the statement.

    Likewise, if the funds stored in the check must be transferred. The bank will check the suitability of the account holder with the check recipient data. If it is different, then it can be rejected.

  • Aan Toonder
    This second type of check is called a Carrier Check. The party issuing the check does not require who can receive the funds in the check. So anyone who takes it can receive money.

9. Billet Giro

This form of payment is commonly used by two parties who make large transactions. The payment method is to transfer a certain amount of balance from one bill to another.

10. Proof of Bank Deposit

Often underestimate the proof of deposit to the bank when making transactions at the teller? This evidence is significant. This evidence is substantial when the marketing has not yet been successful.

Therefore, could you not throw it away right away? Save until the transaction is successful. Several banks have changed the form of this evidence with different shapes and sizes. However, the function remains the same.

11. Current Account

A checking account is proof of the entry and exit of money in a savings account. All transactions will be recorded, whether through tellers, e-banking, or ATMs.

This type of evidence is often needed to know both people and companies’ cash flow and financial health. You can come to the bank and ask the clerk to print it to get it.

12. Return Note

The following example of evidence is a Return Note. As the name suggests, this note shows the transaction of returning goods by consumers. To provide excellent service, many stores serve returns or returns of goods.

Returns are valid if there is damage to the product purchased or the specifications and completeness do not meet the standards. To make a return, the consumer must bring a note.

13. Cash In

This kind of proof of purchase only exists within the company, usually as an attachment to recording incoming money from product purchases, installments, investment returns, etc.

14. Cash Out

In contrast to the cash inflow above, the cash outflow is an example of proof of a company’s disbursement of funds. The finance department prepared this cash book to complete information on the reduction of liquid assets in the form of cash.

iREAP POS, Digitizing Transaction Recording

Recording transactions is significant for a company. Therefore, the storage and bookkeeping must be detailed, clear, and accessible. However, hardcopy recording is often a hassle.

A growing business must be monitored from anywhere. The owner does not always have to stand by to check all transactions. Ireap Pos provides an easy and fast online recording application.

A business owner can check the progress of his business, including the stock-taking of goods just in hand. Practical and very easy. This convenience makes more and more companies believe in iREAP POS.

With the sophistication of the technology used, all data can be presented quickly and thoroughly, even with various forms of graphs, making it easier to monitor.

iREAP POS is a recommended application to help your business grow. With modern technology, easy application, and complete information, using Ireap Pos is the right choice.

To get complete information, immediately visit the website, www.ireappos.com. Professional staff will directly assist you. Now recording proof of transactions is no longer a problem.

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