Advantages of Sales Books

The credit sale transactions are recorded in the sales day book rather than cash sales. Credit sales transactions are those in which consumers, buyers, or purchasers of services are allowed to pay the firm for their services later rather than on the day of purchase. These types of transactions allow the buyer, buyer, or customer to take their time completing payments.

As a result, the firm and salesperson keep a sales day book that records the customer’s name, invoice number, sales amount, and credit sale date to account for such transactions. These books are updated on a daily basis. Monthly, the amount recorded in the book is tallied. On a cash basis, the sales that are made in the sales day book, are never recorded. The cash book is used to keep track of cash sales. No asset or investment transaction on credit would be recorded in the sales book. The journal books, not the sales book, are used to record such transactions. Only finalized product sales on credit are recorded in the sales book.

What is a Sales Book?

A sales book is an original entry or subsidiary book used to keep track of credit sales of items. Cash sales are documented in the cash books, whereas credit sales of any asset other than products are recorded in the journal proper.

Format of Sales Book

The format of a sales book is used to simply record credit sales of items. It means that only credit sales of goods or products intended for sale are kept track of. This book does not keep track of cash sales. The business must post all transactions to the corresponding ledger accounts after they have been recorded in the sales book.

The process of creating a sales book is analogous to that of creating a purchasing book. On the grounds of copies of the invoice delivered to the buyer, entries are made in the sales book.

The purpose of a sales book is to keep track of credit sales of goods that the company sells. Because these transactions are transferred to the cash book and journal proper, sales of items for cash and sales of fixed assets are not recorded in the sales book.

• Date Column — This column represents the date of the business transaction.
• The Buyers’ Names and the Specifics of the Goods Sold are listed in the Particulars Column.
• Outward Invoice No. Column — Displays the outward invoice’s sequential number.
• The page number of the customer’s accounts in the Ledger is noted in the L.F. column.
• Details Column — This column contains the total amount of items sold as well as any trade discounts that may have been applied.
• Total Column — This column displays the total amount owed to the customers.
• Any additional information will be noted in the Remarks column.

Importance of Sales Book

The sales book is an essential document since it allows the company to keep track of credit sales on a daily basis. As a result, the book is a crucial document for small to medium-sized businesses. Because these businesses rely on converting credit sales to cash, this document fulfils the need to account for all financial transactions that occur on a daily basis. Small and medium-sized enterprises can follow up with their consumers to facilitate collection based on reconciliation.

Advantages of Sales Book 

• It aids in the daily documentation of credit sales.
• This document aids in the identification of consumers from whom they still expect payment.
• Small and medium-sized enterprises benefit from it because it promotes responsibility.
• Aids in the reconciliation of the sales ledger on a monthly basis.
• It allows for the separation of roles as well as the provision of sales data in a concise and easy-to-understand style.
• They aid in the gathering of data at a granular level.

Conclusion 

The sales day book is a book that keeps track of a business’s credit sales done. The customer’s identity, invoicing number, invoice date, and sales amount are all listed. Credit sales are tallied at the conclusion of each workday to result in efficient financial sales value, which is reconciled monthly.