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HOW TO VERIFY THE SALES VOUCHERS IN A MANUF. COMPANY

18 December 2009

Dear members,

when we are going to verify the sales vouchers of any manufacturing company then which documents we have to go through & how to verify the taxes that are applicable on it .

from,

Shailendra Dubey

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(Guest)

First of all you should see the procedure for issuing sales invoices and the how the sales are booked. You can refer the following documents: 1. Purchase order received from customer, if any. 2. Check the rate of sales from Purchase order of customer. 3. Then verify the quantity from the delivery challan signed or confirmed from the customer and also calculate the Excise Duty and sales tax (VAT) based on the quantity as per Delivery Challan. Then you should check that all the invoices are accounted i.e. the accounts department is aware of the sales made. Hope this helps you.

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Ronak patel (C.A.) (166 Points)
Replied 19 May 2018

In sales audit, Mainly documents are - Purchase order received from customer, Sales Invoice, Delivery challan, Packing note, Inspection report if any for quality testing requirements mentioned in sales contract terms. Insurance papers if any.

First of all you need to check Purchase order terms i.e. Terms of sales of goods. in that they have mentioned everything - what is rate or price, taxes, who will bear freight charges or other charges, time period within which goods has to be dispatched, payment related terms.

Documents verification is easy - Checking above documents for quantiy and price and Tax calculations. Check when risk and rewards are transferred on the basis of sales contract terms - CIF, FOB, Ex works etc. specifically important at year end - 31st march. because if we have disptached goods by generating invoice on 26th march but goods have not reached to buyer place and terms is CIF then we have reverse that sale becuase risk and rewards transfer only when it reaches buyer's place.

Apart from this Sales price list maintained by Company - you can check that also to confirm that price quoted is from approved list. You can work out Delay in dispatch of goods from due date of delivery because it will deteriorate company's image.

Now Ind AS 18 - in case of credit sales - you need to find out present value by discounting with appropriate rate and book revenue - keep in mind for Private companies above 250 cr turnover right now.
For taxation, HSN codes are mentioned for goods items - you can check rate of tax applicable to that goods and then calculation of it. If buyer has provided some material or anything like that then it is a case of sale where price is not the sole consideration of sale so we need to check valuation rules.

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