Debit note vs debit advice

Indian Accounting Standards 8825 views 4 replies

M. SIVAKUMAR

Manager-Accounts

76 Points Posted on 23 January 2015

Dear Friends!

I would like to have a breif discussion about the Two Different Term : DEBIT ADVICE & DEBIT NOTE

As per my views, these two terms in respect of a business transaction are as follows

DEBIT NOTE:

A Debit Note is issued against Deduction of a portion of amount against payable to supplier towards reasons like rejection/shortage/damages,etc of supplied materials or expenses incurred on behalf of the third party like Freight/Insurance/Packing/Marketing/Conveyance, etc.

Here I mean the Debit Note is a document representing the deductions from the payables of a Third Party of a business. AND IT IS BEING DEBITED ONCE THE DEBIT NOTE ISSUED

DEBIT ADVICE:

Though the transaction of the both is the same ie deduction of amount against payable. But the Place or to whom it was deducted makes the difference.

Here, an Expenses or cost of a transaction was already incurred on behalf of a person/company related with the business itself like Tieup arrangement of companies for manufacture, etc.

Hence, AN DEBIT ADVICE IS BEING ISSUED TO THE CONCERN PERSON/COMPANY RELATED TO THE MAIN BUSINESS ABOUT THE DEDUCTION/EXPENSES INCURRED,ETC.

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I hope I am in the right way and request CA Club freinds to comment on this please to have a better terms for this phrases.

Best Regards.

M.Sivakumar

Manager-Accounts

Replies (4)

Quick Summary

Debit note and debit advice are generally used interchangeably in accounting. Both inform a party that their account has been debited due to purchase returns, shortages or expenses. Debit advice is also commonly used in banking for account debit instructions.

Sai Prasadh

Investment advisor

139 Points Posted on 23 January 2015

Sir

A debit advice is also called a debit memorandum, debit note or debit.

In simple term - whenever u debit a person in yr books u can send a debit note/advice to the concerned party starting that i hv debited u in my books.

when u issue debit note to supplier - yr liability is reduced (as credit is reduced)

when u issue debit note to yr customer - it means u are indicating yr customer that u r my debtor and need to pay yr settlement.

Hope u got clarity

thanks

ANUP GUPTA

KEEP SMILING fcaanupgupta@gmail.com

303 Points Posted on 23 January 2015

Concept of Debit Note & Credit Note in the Books of Accounts

CONCEPT OF DEBIT NOTE & CREDIT NOTE IN THE BOOKS OF ACCOUNTS

Business के अन्दर हम Purchase और Sale दोनों करते है! जब हम Purchase करते है तो पहले हम Purchase का बिल Receive करते है और फिर हम Purchase की entry करते है :-

Purchase A/c Dr.

To Sundry Creditors A/c

इसी तरह जब हम Sale करते है तो पहले Sales का Invoice issue करते है और फिर entry करते है :-

Debtor A/c Dr.

To Sales A/c

यहाँ तक कोई issue? नहीं Sir, कोई issue नहीं! चलिए फिर आगे चलते है

जिस तरह हम purchase करते है उसी तरह हमे goods पसंद ना आने पर या goods के defective होने पर हम goods return भी करते है जिसे हम Purchase Return या (GR)के नाम से भी जानते है! और अन्दर कि बात बताऊ तो कभी कभी ऐसा भी होत है कि हमें goods किसी दूसरी जगह से और भी सस्ते rate पर मिल रहे होते है तो इसलिए भी हम कई बार चालाकी करते है और goods जो purchase कि थी उन्हें return कर देते है, मगर आप ऐसी चालाकी बिलकुल मत करना!

जब हम purchase return करते है तो हम entry pass करते है :-

Creditor A/c Dr.

To Purchase Return

इस entry में हमने creditors के account को debit किया है जिसके लिए हम creditors को debit note issue करेंगे जिसका मतलब ये हुआ कि अब हमें हमारे creditors को कम payment करनी होगी! In Simple words, जो भी व्यक्ति debit note issue करता है वो अपनी books में दूसरी पार्टी का account debit करता है! Generally purchase return के लिए हम अपने creditors को debit note issue करते है!

For more details you may visit to https://taxvax.blogspot.in/2015/01/concept-of-debit-note-credit-note-in.H T M L

or click here

TaxVax.blogspot.in

M. SIVAKUMAR

Manager-Accounts

76 Points Posted on 24 January 2015

Dear Mr. Sai & Mr.Anup Gupta,

Thanks for your comments, here I would to get a clear meaning of Debit Note & Debit Advice. Is this both terms are same or different in meaning.

I thought the Debit Note is from the Company to third party and Debit Advice is to the Internal parties like Tieup companies, etc.

M.Sivakumar

Sai Prasadh

Investment advisor

139 Points Posted on 24 January 2015

Sir

To my knowledge, i think both r same only.

i use only debit note.

but i have come across the word debit advice in banking, where customer give standing instructions (also called debit advice ) to banks to debit thier account and pay utility bills telephone bill, Eb Etc every month.