new business module

118
BUSINESS SKILLS
Suppliers sometimes offer credit to their customers. They normally
establish a maximum credit line and a fixed repayment
period. Entrepreneurs should be careful not to abuse this
service and make sure they reimburse their credits on time.
They thereby establish a good credit record and build up a
relationship of trust with suppliers. The “Purchases on credit”
form can be used for this.
The form also prevents misunderstandings by having the two
parties confirm all transactions. Entrepreneurs receiving the
credit confirm their debt with a signature and the supplier
confirms the entrepreneur’s reimbursement with a signature.
This prevents disagreements.
Note that entrepreneurs should keep a separate record (i.e.
form) for each supplier from whom they receive credit. This
way, suppliers cannot be mixed up and the entrepreneur’s
information is protected, as only the entrepreneur and the
supplier see the amounts.
Purchases on credit (see Hand-out 45)
Purchases on credit
Name of supplier:
Putput Chickenfeed Inc.
Contact information: Moneytown, Gold Street 12, Tel. 876 9090
Credit period:
30 days
Credit line: $50,000
Date
Transaction
Credit
amount
Amount paid
Outstanding
amount
Signature
01.5 Purchase 500 kg chicken feed 25,000 0 25,000 H. Pestalozzi
15.5 Purchase 500 kg chicken feed 25,000 0 50,000 H. Pestalozzi
29.5 Reimbursement 25,000 25,000 P. Putput
05.6 Reimbursement 15,000 10,000 P. Putput
07.7 Purchase 250 kg chicken feed 15,000 0 25,000 H. Pestalozzi
10.7 Reimbursement 10,000 15,000 P. Putput
Note: One form per supplier
The business representative signs on receiving the credit to confirm.
The supplier signs when the credit is reimbursed to confirm.
Also note that as soon as a credit has been reimbursed – a
payment made from a customer to the entrepreneur or from
the entrepreneur to a supplier – the amount paid must also
be recorded in the cashbook. Cash comes into the business