What is a Bill?

Create purchase bills in GST to help you manage your expenses better

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What is a Bill?

A bill is an official document issued by a vendor to a buyer to showcase the products and or services that the company purchases. The vendor issues you the respective supplied on credit, which is why they issue you a bill. You register this bill in your invoicing software and track it until it is paid.


What are the differences between a purchase order and a bill.

A purchase order is a document that a buyer issues to a vendor describing the products or services that a company wishes to buy. A bill is a document the buyer enters in their invoicing software to record the goods or services that they received from the vendor, which they are obligated to pay for.



Bill

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Issued by a vendor to a buyer

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Bills are generated after purchase orders

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Is used to showcase the goods and services a seller receives from a vendor

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Defines the confirmation of a delivery

Purchase order

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Issued by a buyer to a vendor

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Purchase orders are generated before bills

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Shows the goods and services a seller wishes to buy from a vendor

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Marks the terms of a sale


How to create a Bill under GST using Sleek Bill

When using invoicing software you can turn the purchase order that you have previously issued into a bill, to have a statement of the products (or services) you ordered and the money you spent on them, but to also automatically add the corresponding items to your stock.

When you receive the purchased items, you can make a bill based on your purchase order or if you do not have a purchase order, simply create a new bill that should contain the following:

  • Vendor name and details.
  • P.O number and date (if existent)
  • Issue date for the bill
  • The products / services that you have purchased with their respective quantity, purchase rate, value and tax rate.

There are 2 methods of creating a bill in Sleek Bill.

Creating a bill from a purchase order

A purchase order that has an open status in Sleek Bill can be converted to a bill by opening it and selecting “Convert to Bill”.

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All the details in your PO will be automatically copied to the bill. You will also be able to later add a payment to this bill to clear it.

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Save your new bill and your stock will automatically be updated.

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Creating a standalone bill

You can create a bill in Sleek Bill without having a purchase order. Just go to your home screen and click on “+Bill”.

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Enter the relevant details about the products you have ordered and need to pay for, also adding the vendor’s data and the payment terms.

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Save your new bill and your stock will automatically be updated. You will also be able to later add a payment to this bill to clear it.

bill2

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Adding purchase orders and bills in Sleek Bill means that your items report will contain updated details about your finances such as COGS (cost of goods sold) and gross margins on each of your items, which helps us gain more control over your business.

Find our what is a purchase order and how to make one.

GST Explained


GST, short for Goods and Services tax, is a new tax that will be imposed on the sale and purchase of goods and services in India. GST is meant to replace all taxes in India with a single unified tax applied to value addition instead of the total value of the product at each stage in the supply chain.

This method provides credit for the input tax paid on the purchase of goods and services, which can be offset with the tax to be paid on the supply of goods and services. As a result, this reduces the overall manufacturing cost, with the end customer paying less.

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With certain current taxes remaining, the following goods and services will be fully or partially exempted from the GST

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Free movement of goods: Business owners will be able to sell more in other states without having to worry about interstate transaction costs. With GST, the entry tax will be eliminated, which will save time and money spent.

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Currently, there are many indirect taxes that both the state and central governments are collecting on every purchase and sale.

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The GST will follow a similar model with the one before it

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GST will have a 4-tier tax structure

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One of the main reasons for GST being introduced in India is the tax burden that falls both on companies and consumers. With the current tax system, there are multiple taxes added at each stage of the supply chain, without taking credit for taxes paid at previous stages. As a result, the end cost of the product does not clearly show the actual cost of the product and how much tax was applied. This cascading structure is too complex and inefficient.

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For inter-state transactions, the Centre will levy Integrated GST (IGST), which is equal to the average of the CGST and SGST rates. After applying IGST, CGST and SGST credits received from purchases, the seller will then pay the remaining IGST on the added value.

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Businesses with turnover revenue of 20 lakhs and above will have to register and file for GST returns, with a threshold of 10 lakhs for businesses in the north east and hill states.

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A combination of CGST and SGST will be applied to the import of goods and services that come to India. Tax benefits and credits will be given to the state where the imported goods and services are consumed.

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