Debit Note Vs Credit Note: A Comprehensive Study

 Introduction

In business transactions, a debit note and a credit note are the two significant tools for maintaining accurate financial records. For efficient financial records of sale return and purchase return transactions, businesses use the debit note and a credit note as the official documents.

The main difference between a debit note and a credit note lies in the origin of the two. A debit note comes from the buyer while the credit note originates from the seller. You can use accounting software like Eazybills to issue a debit note or a credit note along with other billing options.

What is a Debit Note?

A debit note is an accounting document issued by the buyer to the seller. It is the official document used to correct and adjust the financial invoice for the sale of goods and services. But it is commonly used by the seller when he needs to increase the amount of the products and charge tax on them. Eazybills help you issue debit notes in GST.

The seller used a debit note to inform the buyer about the current debt obligation in the buyer's accounts. For the seller, it increases the number of receivables in the books of the seller. Debit notes are the commonly used accounting tool that facilitates the accuracy of the books and makes business transactions more efficient.

What is a Credit Note?

A credit note is a financial accounting document in business transactions issued by the seller to the buyer. It indicates that the buyer owes less than the amount stated on the original invoice. The vendor used a credit note to assure the buyer that he (the buyer) is entitled to the credit because of the return of the goods, cancellation of an order, invoicing errors, product quality issues or price changes.

A credit note also ensures that the purchase return is accepted by the seller. It is commonly known as a refund statement to the buyer's account as a credit note concedes and records a specific amount is credited to the account of the buyer. Use Eazybills to issue credit notes.

Difference between a Debit Note and a Credit Note

Debit note vs credit note becomes the principal key to understanding where the business regularly deals with both terms. Below is the list of key differences between a debit note and a credit note.

1. Meaning

• A debit note is a document issued by the buyer to the seller to return the goods received due to quality defects or other issues. A debit note in GST is similar.
• A credit note is a financial document issued by the seller to assure that the purchase return is accepted by the buyer.

1. Issuer

• A debit note is issued by the buyer.
• A credit note is issued by the seller.

1. Purpose

• The purpose of a debit note is to acknowledge an increase in the amount received from the buyer.
• A credit note is to acknowledge the decrease in the amount received from the buyer.

1. Accounting

• Under the accounting term, a debit note is written in the purchase return books.
• Under the accounting term, the credit note is written in the sales return books.

The difference between a debit note and a credit note is now understood. A debit note vs credit note is issued by a buyer and a seller respectively. Eazybills is an outstanding billing software that can help you with all your accounting needs.

Difference Between Digital and Electronic Invoice

 Electronic invoicing and digital invoicing are both new-age tools for financial aid. The invoice system helps create, send, and receive bills. EazyBills lets you use the most secure and fast billing software for invoice with GST. Let’s dive into this article to learn the difference between digital and electronic invoices.

What is an Electronic Invoice?

The electronic invoicing system generates and handles invoices electronically. This invoice can be written, sent and received electronically. All the paperwork and human interference are eliminated in this type of invoice. An electronic invoice can be sent through various accounting software that machines can read only. Choose from the best accounting software like EazyBills to get your job done.

In this process, clients can get bills and other information electronically. This system of invoices is efficient to generate and manage as it does not require any paperwork and saves time and money. The electronic invoicing system is processed automatically in the business's accounting system, so it does not require any kind of human intervention, and there is no chance of human error. It is the invoice in which all the data can be transferred between the machines and that's why it is generally not understandable by humans.

What is a Digital Invoice?

On the other hand, there is one more type of invoice which is digital invoicing. A digital invoice is an invoice that can be sent or received digitally, and it essentially can be readable on screen which means it can be viewed by a person. These invoices are generated and shared as PDF files, word files, scans and many more.

Although both the invoices may sound the same as both having the word electronic and digital, that means no paper but there are the differences between the two. As electronic invoicing is an automated and machine-readable process it can`t be viewed or edited by humans whereas a digital invoice is not a fully automatic process, it's not machine-readable, they are created to be read by humans which means there is the possibility of human errors in this as it can be viewed or edit by a person. But digital invoices avoid the need to print the data, and they can be sent or received anywhere in the world.

Comparison between Electronic Invoicing and Digital Invoicing

• When comparing both invoices, an electronic invoice is the most beneficial system for sending or receiving bills as it provides more features and has perfect accuracy because all the data is created by the machines, and it also reduces time and effort.
• An electronic invoicing is most suitable for large-scale business operations whereas if one is having a small or medium scale business digital marketing is the best solution for that.

Having said that, people have various options to choose the best billing software for electronic invoicing systems. With EazyBills, your electronic billing is now made easy, fast, and secure with a lot of convenient options available.