In the world of business paperwork, a small but mighty document plays a crucial role in the sale of goods – the delivery note. Also known as a commercial invoice or sales invoice, this document carries significant weight in ensuring smooth transactions.
Whether you’re a seasoned entrepreneur or just dipping your toes into the business realm, understanding the ins and outs of delivery notes is key. In this blog, we’ll break down its function, shed light on its importance, and discuss how it’s different from GRN.
What is a Delivery Note?
A delivery note is a document issued by a seller to confirm the delivery of goods made to a buyer. It includes information like the type and quantity of items delivered, the delivery date, additional documents or instructions, and the buyer’s acknowledgment of receiving the goods. While delivery notes are usually printed, they can also be sent through email.
Employing delivery notes assists a business in having a clearer picture of what they receive and send out. It also provides customers with a means to verify that they have received all the products they paid for. If anything is missing from the shipment, the person receiving it can promptly get in touch with the seller. They can use the delivery note to let the seller know what’s wrong with the delivery.
Why are Delivery Notes Used?
When you include a delivery note with your shipped goods, your customer can use it as a checklist to make sure everything is included. Every item listed in the delivery note should be in the shipment. The note also indicates if any items from the original order are missing, providing a clear overview of what the recipient ordered and what’s included in that specific delivery.
Sometimes, the recipient signs a copy of the delivery note, which is then sent back to the seller or consignor. This signed copy serves as proof of delivery and is referred to as ‘recorded delivery’ or ‘signed for delivery.’ If the recipient has signed the delivery note, you can be confident that your package has reached its intended destination.
Importance of Sending a Delivery Note
Sending delivery notes is important for several reasons in business transactions:
Confirmation of Goods Delivery: The primary purpose of a delivery note is to confirm that the seller has successfully delivered the goods to the buyer. It serves as a tangible record of the completion of the delivery process.
Documentation of Goods Details: Delivery notes include crucial information about the delivered goods, such as the type and quantity. This documentation helps both parties ensure that the correct products and quantities are received.
Record-Keeping: Businesses use delivery notes to maintain accurate records of their transactions. These records are valuable for accounting audits and overall business management.
Transparency and Accountability: The inclusion of essential details in a delivery note promotes transparency in business transactions. It helps build trust between the buyer and seller by providing a clear account of the delivered goods.
Formal Proof of Delivery: In certain situations, especially in international trade or when goods are transferred between different parties, a delivery note serves as formal proof that the goods were delivered as agreed upon.
Facilitation of Payment Processes: Delivery notes can be linked to invoicing and payment processes. They provide a basis for generating invoices, allowing businesses to accurately bill their customers for the delivered goods.
Legal Compliance: In some industries and regions, maintaining proper documentation, including delivery notes, is a legal requirement. Adhering to these regulations helps businesses avoid legal issues and ensures compliance with industry standards.
What Information Should a Delivery Note Include?
A delivery note, even if not mandatory, should have a specific structure whether you’re using delivery note software or creating a template in Word. The key is to ensure clear communication between the sender and the receiver.
The delivery note should include:
1. Seller’s name and contact details
2. Customer’s name and contact details
3. Date of issue
4. Date of delivery
5. Description of the ordered goods
6. Quantity of each product in the shipment
Optionally, the delivery note may require the receiver’s signature or stamp as confirmation of the goods being received.
Here’s a standard template for a delivery note:
Maintaining consistency in your company branding, such as using the same logo and design on invoices and delivery notes, helps make your shipments easily recognizable to customers. This not only enhances your company’s professional image but also extends your branding consistently across communication materials.
When is a Delivery Note Preferred More Over an Invoice?
A delivery note is preferred over an invoice in certain situations, and here are some reasons why:
Confidentiality: The buyer may prefer not to disclose the exact amount paid for a product. Using a delivery note instead of an invoice allows them to keep the financial details confidential.
Supplier Anonymity: In some cases, the buyer may wish to keep the identity of the supplier confidential. Utilizing a delivery note helps maintain anonymity in the transaction.
Lack of Trust or Relationship: The buyer might not trust the supplier, or they may no longer wish to engage with them. Using a delivery note allows for a transaction record without the formalities of an invoice.
How Delivery Note is Different from a Goods Receipt Note?
The primary difference between delivery notes and goods receipt notes lies in their purpose and the issuing party. The delivery note is provided by the seller to the buyer and serves as proof that the goods have been delivered from the seller to the buyer. It includes details such as the type and quantity of goods, delivery date, and may also serve as a checklist for the recipient.
Whereas, the goods receipt note is generated by the buyer upon receiving the goods. It acknowledges the receipt of goods and verifies that the delivered items match the details mentioned in the purchase order or agreement.
Let’s explore the key differences between these two documents:
Do Delivery Notes Have Legal Authority?
Delivery notes generally don’t inherently possess legal authority, but they play a crucial role in providing evidence and documentation in business transactions. Whether a delivery note holds legal weight depends on the context, local laws, and how it’s used in conjunction with other documents and agreements.
Here are some key considerations regarding the legal status of delivery notes:
1. A well-prepared delivery note can serve as proof that a transaction is complete and that goods were delivered as agreed. This documentation can be valuable in resolving disputes.
2. In certain industries or regions, there might be legal requirements mandating proper documentation, including delivery notes, for purposes such as taxation, regulations, or customs compliance.
3. While a delivery note alone may not initiate legal action, it can be used as supporting evidence in legal proceedings. For instance, it can strengthen cases involving non-payment, contract breaches, or other disputes.
Accurate and comprehensive delivery notes play a crucial role in minimizing the chances of invoice disputes. When all the details are clearly outlined in the delivery note, it provides a solid reference point for both parties. This clarity reduces misunderstandings and disputes, ensuring that invoices accurately reflect the goods delivered.
Peakflo’s Customer Portal takes this a step further by facilitating faster resolution of disputes. By providing a platform where customers can easily access and review invoices and related details, any discrepancies can be quickly identified and resolved. This streamlined process not only enhances customer satisfaction but also strengthens the business-customer relationship by demonstrating transparency and commitment to accurate transactions.