The definition of cash memo is a document that a seller passes to a buyer at the time of a specific purchase of goods or services. It is the equivalent of an invoice and is only used to record transactions that are paid for using cash, rather than bank transactions or checks.
A cash memo will contain the following information:
• Date of purchase
This is vital as the date of the purchase enables the transaction to be placed in the correct month of the business accounts.
• Details of goods or service sold
This shows the amount of items purchased, or the service provided, so that the amounts can be tracked easily in the future.
• Price of items sold
The price of individual items is included on a cash memo. There are also sub-totals for totals of the same item, as well as the final total of the transaction that took place.
• Name and address of seller
This is vital as the finances of the company may be checked in the future, and this enables those auditing the accounts to be able to cross-reference the two companies, and will ensure that both companies have placed the cash sale/purchase through their books.
• Name and address of buyer
As with the above point, this is vital to cross-reference the transaction, if this is needed.
A cash memo is recognized as a legal document, in the same way that an invoice is. The only difference is that the cash memo is for any transaction that is paid for in cash. An invoice can also be used in this respect, but many companies find it easier to differentiate between cash sales and those paid for at a later date.
A cash memo will contain the following information:
• Date of purchase
This is vital as the date of the purchase enables the transaction to be placed in the correct month of the business accounts.
• Details of goods or service sold
This shows the amount of items purchased, or the service provided, so that the amounts can be tracked easily in the future.
• Price of items sold
The price of individual items is included on a cash memo. There are also sub-totals for totals of the same item, as well as the final total of the transaction that took place.
• Name and address of seller
This is vital as the finances of the company may be checked in the future, and this enables those auditing the accounts to be able to cross-reference the two companies, and will ensure that both companies have placed the cash sale/purchase through their books.
• Name and address of buyer
As with the above point, this is vital to cross-reference the transaction, if this is needed.
A cash memo is recognized as a legal document, in the same way that an invoice is. The only difference is that the cash memo is for any transaction that is paid for in cash. An invoice can also be used in this respect, but many companies find it easier to differentiate between cash sales and those paid for at a later date.
