The sales book is a book used in the accounting of the companies and in it all the credit operations that support the sale of goods and services carried out by a company are recorded. Likewise, this record allows calculating the amount of taxes that must be paid on said sales.
In other words, all the payment vouchers issued by a company must be recorded in this book. The registration of these documents must be prepared following a chronological and correlative order. Because, it is a tax requirement.
It is important to clarify that the sales book is an auxiliary book of the daily book. For that reason, sales of goods and services that are paid for with cash should not be entered in this book. Since, these operations are recorded in the cash book. Also, it is known by other names such as: sales journal book, sales invoice book and sales record book.
Undoubtedly, all companies are required to keep a sales book as a tax requirement. Since, in this book, all companies have the obligation to record in accounting form all the sales they make within their economic activity.
Keep learning economics, finance and investment
Learn from scratch to improve your finances and investments, or specialize in the most in-demand areas of financial work: investing, stocks, savings, asset management, banking, business analysis, and accounting. All courses in a single subscription.
Now you can watch the first episode of each course for free:
Indeed, the sales book is an accounting document and it tracks the sales made in the company. This book can be a physical or digital document.
With the digitization process that the planet has undergone, it is more common to use electronic spreadsheets or computer systems to keep track of sales. Because it is much easier to organize and make notes in the corresponding columns.
What data should be recorded in a sales book?
The most important data to record are:
- The number that identifies the invoice that is issued and in which the amount of income is reflected.
- The date on which the invoice is issued or the date on which the credit sale operation is carried out. This in case it is a different date.
- The company name and tax identification that identifies the recipient.
- The concept of why the document is made.
- The amount of the operation and the taxes required according to the legislation of each country.
Of course, all this data that is recorded in the sales book is made based on the copies of the invoices or documents that are sent to the buyer. In addition, these annotations document all sales movements made by the company.
This record is made for a certain period of time. Undoubtedly, these data are very important because they allow knowing the income that a company obtains from the commercialization of its products.
What is the importance of keeping a sales book?
Naturally, for companies it is very important to keep a sales book in their accounting. Since, it allows to have clear and detailed information about all the credit sales that the company makes with its clients. Containing in summary form the client to whom he sold, the number, the date and the amount of each invoice that was issued.
However, credit sales are recorded on a daily basis. But, later, this information is transferred to the sales book that must be updated each term of the monthly period. The fundamental basis for documenting each operation is the invoice that is sent to the client.
This document requires the customer to pay the amount indicated on the invoice for the goods and services received. It also serves to comply with the required fiscal and tax regulations.
What counts as a sale?
Now, a sale is to transfer the right of ownership of a good or service offered by the company. All this in exchange for an amount of money. For that reason, sales generate income and help companies stay in the market. Accounting, a sale represents the amount of money that is charged for the services or products provided.
On the other hand, the data of the income compared to the costs that a company has allows the calculation of the profit obtained. That is, by comparing income against expenses, the company can know if it wins or if it loses. A company makes a profit when its income is greater than its expenses. Whereas, if the income is less than the costs incurred, you have a loss.
In conclusion, we can say that a sales book basically records all credit sales made by a company. The information is recorded based on the extended documents, generally they are the issued invoices. It is part of the company’s accounting and is used for tax purposes.