In business, the recording of transactions takes place only when there is some documentary evidence present. They confirm the transaction. These can be in the form of receipt, counterfoil, cash memo, pay-in-slips, and invoice. These evidences are nothing but a source document. These documents act as a base to prepare vouchers. Based on these vouchers, the accountant passes entries in the books of accounts. Coming to invoice, whenever any credit sale transaction takes place, the firm prepares … [Read more...]

A private limited company is a closely held one and requires at least two or more persons, for its formation. On the other hand, a public limited company is owned and traded publicly. It requires seven persons for its setup. What is a Company? The company refers to that voluntary association of persons which is established with an aim of achieving common objectives. It is a separate legal entity, i.e. one should not confuse between the company and its members as both are different … [Read more...]

A Purchase Order is simply an order raised by the organization, which contains information related to the product or the number of products that the organization wants to purchase from a supplier. On the Contrary, a Sales Order implies an order generated by the firm and delivered to its customer that acts as a confirmation document regarding the supply of the specified quantity of the goods or services, at a specified time, and agreed upon terms and conditions. Basically, the purchase order … [Read more...]

Manager - An employee of the organization, responsible for its management. Leader - A person who leads, guides, and directs others. There is always a buzz when we talk about the terms leader and manager. In an organizational setup, a manager is an important link between the firm and its stakeholders, i.e. employees, customers, suppliers, shareholders, government, society, and so forth. He is the one who performs basic managerial functions. Conversely, a leader is the one who inspires, … [Read more...]

The sales executive is the most important link between the company and its clients, who offer products and services to the customers and negotiate contracts, so as increase profits. On the other hand, marketing executives, play a crucial role in every organization who work with other employees, such as market research team, distribution staff, advertising team and so on The marketing executives focus on maximizing profits by creating sales and providing those products to customers that match … [Read more...]

In a commercial transaction, a product or service is exchanged for a price, between the buyer and seller. So, we can say that price is the amount to be paid, in order to get the product or service. There are many people who believe that price, cost and value of a product or service are one and the same thing, but there is nothing like that. Cost is basically the aggregate monetary value of the inputs used in the production of the goods or delivery of services. Conversely, Value of a product … [Read more...]

To understand the market mechanism, one needs to have a good knowledge of demand and supply, as these two forces regulate the entire market. Demand implies the desire for a good, supported by the ability and readiness to pay for it. On the other hand, supply alludes to the total amount of a commodity ready for sale. When demand rises there is a shortage in the supply and when a supply is enough the demand falls short, so there is an inverse relationship between these two elements. Nowadays … [Read more...]

A business entity always focuses on increasing revenue, because it is the revenue which decides its fate. In addition to this, the profit of the company also greatly depends on the revenue earned. For earning profits, revenue should always be more than the cost of inputs, or else the firm would not be able to survive in the long run. Revenue is the proceeds which a firm earns from different activities, in a particular period. On the contrary, profit, as we all know, is the surplus of income … [Read more...]

While sales is more of transaction-based, marketing aims at winning and retaining the customers for the long term. These two often share a common goal of increasing the company's revenue but differ in their functions and process. Basically sales imply the exchange of products and services for money or money's worth. On the other hand, marketing is an umbrella term which indicates a set of activities that starts with the market research and ends with consumer satisfaction. The focus of the two … [Read more...]

Micro Economics talks about the actions of an individual unit, i.e. an individual, firm, household, market, industry, etc. On the other hand, the Macro Economics studies the economy as a whole, i.e. it assesses not a single unit but the combination of all i.e. firms, households, nation, industries, market, etc. ‘Economics’ is defined as the study of how humans work together to convert limited resources into goods and services to satisfy their wants (unlimited) and how they distribute the same … [Read more...]