Sales Day Book and Purchases Day Book
Sales Day Book is the manual book that records daily credit sales which includes customer name, invoice number, date, and total amount. It is the subsidiary book, and also known as a sale book or sale journal. Accountants summary all invoices and record them in the sale daybook at the end of the day. After that, the detail will be transfer to the sale ledger in the accounting system.
Only credit sale is recorded into sale daybook, cash sales will be recorded to cash book. Moreover, it is strictly recorded only the sale of goods which is the main business activity. Other sales will be recorded directly into the journal voucher.
Sales day book is very important for a big company where thousand daily transactions incur. There are several accountants who prepare day sale book before recording into the accounting system. It is very hard to post each transaction directly into the ledger, the risk of error is very high.
Sale Day Book Format
Advantage of Sale Day Book
- Reduce risk of error: sale day book allows the accountants to prepare a record before posting it into the ledger. They are able to review before posting, so it will reduce some errors if compare to direct posting.
- Work best for big company: For a big company, there are thousand of sale transaction happen daily, so it is hard to control direct posting.
- Reduce risk of fraud: Sale is a significant account that faces a high risk of fraud. Sale day book allows management to set proper control for each book. The company can set up internal control to review the daily report, so any issues will be identified on time.
- Help to reconcile with sale ledger: In case of error, we can trace back from sale ledger to day sale book and peform the reconciliation.
Disadvantage of Sale Day Book
- Manual work: Sale day books require manual work which is not effective. Accountant needs to record base on each individual invoice which is very time-consuming.
- Double work: accountant need to record into the sale day book and the same transaction need to record in the sale ledger again.
- Better invest in new technology: Company should consider investing in new tech such as bar code scan which is very accurate and effective. Each transaction will be recorded directly to sale ledger with less error.
Purchase Day Book
Purchases day book is a manual book that records daily purchases which includes supplier name, date, invoice number, and outstanding amount. It is the subsidiary book that records the purchase of goods or services on credit. Its record and summary of all purchases that the company buys on credit before posting into the purchase ledger. All purchase day books will be combined before posting into the accounting system.
It very important for a big company that makes many purchase transactions each day. So they will separate the purchase into the purchase day book. Each book will be record, review, and reconcile with billed invoices. After that, all of the purchase books will end up record into the purchase ledger.
Purchase return and cash purchase will not include in the purchase day book. A cash purchase will include in cash book while the purchase return record in the journal voucher.
Purchase Day Book Format
Advantage of Purchase Day Book
- Reducer risk of error: when using purchase day book before posting to purchase ledger, it will become a layer to detect any error before data even go into the accounting system. It also allows authorized personnel to review the report after completing the purchase day book.
- Help to control Accounts Payable: The purchase day book will enable us to reconcile between purchase ledger and billed receive if there is any variance. It also helps us to keep track of outstanding accounts payable and make payments before their due date.
Disadvantages of Purchase Day Book
- Double work: we need to spend time to record to purchase day book and re-enter again into payable ledger. Double work means we need to spend on more staff to do the same thing.
- Manual work: It is the manual control that requires many work and less accuracy if compare to automatic systems such as bar code or auto-generate transaction.