B1: 3.02 The Sales Day Book & Sales Returns Day Book

The Sales Day Book

The Sales Day Book (or “SDB”) is where we record information about the business’ credit sales (i.e. those sales where the customer is given time to pay). It therefore records information taken from the business’ sales invoice. But what information will we record?

Different organisations might record slightly different information from their sales invoices but the Sales Day Book will almost always include:

  • The date of the invoice
  • The name of the customer on the invoice
  • The reference for that customer
  • The invoice number
  • The total or gross amount invoiced
  • The VAT charged on the invoice
  • The net amount invoiced
Example of a typical Sales Day Book

Each week, month or quarter (depending on the needs of the organisation) the bookkeeper will add up the columns containing monetary amounts. Then a new period will begin and further sales invoices will be recorded in the Sales Day Book.

Some organisations will include additional columns to record different types of net sales. A scrap metal merchant might, for example, have columns to record net sales of different types of metal.

Example of a typical Sales Day Book where the net sales are split between different types of sales

After calculating the totals for a period, a bookkeeper should conduct a “cross-add check”. This involves adding the total of the Net Sales column(s) to the total of the VAT column and checking that adds up to the total of the Gross (or Total) column. If it doesn’t, an error has been made somewhere and this should be investigated and corrected. In the example above, we would add the totals of the steel sales, copper sales and VAT columns together (£745 + £430 + £267; i.e. £1,602) and compare this against the total column (£1,602).

The Sales Returns Day Book

The Sales Returns Day Book (“SRDB”) is where we record information taken from credit notes issued by a business to its customers (nb. a credit note is a financial document that records a reduction in the amount previously charged to a customer).

A business will lay out its Sales Returns Day Book in an almost identical fashion to the way it lays out its Sales Day Book. The only differences will be that it will have a column to record the credit note number rather than invoice number and the net columns may refer to Net Returns (or Net Sales Returns) rather than Net Sales.

Example of a Sales Returns Day Book (the differences between the column headings and those in a SDB are circled)

Where a business’ Sales Day Book records different types of net sales the business’ Sales Returns Day Book will also include columns to record different types of net sales returns. For examples, if the Sales Day Book has columns for Food Sales and Drinks Sales, the Sales Returns Day Book will have columns for Food Sales Returns and Drinks Sales Returns.

As was the case with the Sales Day Book, the columns of the Sales Returns Day Book will be totalled each period and a cross-add check completed to give some assurance that no errors have been made in its completion.

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