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5 Min. Read

What Is a Delivery Note? Everything You Need to Know

What Is a Delivery Note? Everything You Need to Know

Do you know what a delivery note is?

A delivery note is an important document that's used in the sale of goods. It's often referred to as a commercial invoice or sales invoice. This article will explain the function of a delivery note and the part it plays in the sale of goods.

If you're not familiar with this type of document, don't worry. We'll cover everything you need to know about delivery notes below! You'll learn about some other important concepts and facts about them.

Here’s What We’ll Cover:

Why Are Delivery Notes Used?

Why A Delivery Note Is Used Instead of an Invoice

How to Make a Delivery Note or Commercial Invoice

Receiving Payment for Your Delivery Note

Why Is a Delivery Note Not Used as Payment?

Key Takeaways

Why Are Delivery Notes Used?

When you're selling a product, a delivery note is the document that records your sale. This includes items ordered by an individual customer and those ordered by another company or business. For example, say you own a delivery company. You have been hired to deliver 40 boxes of soda to an office building in New York City. The client has ordered this product from a distribution company. They will use the delivery note to document proof of delivery and receive payment for their order. Your product will be recorded in the distribution company's books.

Why A Delivery Note Is Used Instead of an Invoice

A delivery note is used instead of an invoice for several reasons, including:

  • The buyer may not want to show how much they paid for a product.
  • The buyer wants to keep the supplier anonymous.
  • The buyer does not trust the supplier or simply doesn't want to deal with them anymore.

There are plenty of reasons why a delivery note rather than an invoice would be used for a sale transaction. This is very common in international sales as well.

How to Make a Delivery Note or Commercial Invoice

Creating a delivery note or commercial invoice isn't too difficult. If you've been hired to provide goods for an order, you'll first need to discuss the details of the sale with the buyer. You need to receive approval for your products and services. Then, prepare and send them a detailed list of all the items that were sold in the transaction. This is part of your delivery note.

For example, if you sell household supplies like cleaning products, the list should include every product and brand you provided for each buyer. You will need to add additional information such as:

  • Quantity - How many items were sold in the sale.
  • Price - The total cost of the transaction.
  • Description - A detailed explanation of each product provided for sale.
  • Contact details 

The delivery note includes all the information you and your client need to accurately record the transaction in both your books and theirs. It helps put each party's mind at ease. Make sure you don't forget anything! You must provide an accurate list of every item that passed hands during the sale.

Receiving Payment for Your Delivery Note

After you create your delivery note, you'll need to track down payment for your products or services. You'll have several options at this point. For example, the distribution company that sold the product may pick up the payment for you.

They may also let you know the exact amount you need to charge for your delivery note up front. They can deduct their fees and then send you the remaining sum of money owed to you. This is very common when using an online invoice system like InvoiceBerry.

Why Is a Delivery Note Not Used as Payment?

It may seem strange that a delivery note isn't used as payment. However, it's actually a very common practice to leave payment as an open issue. In some cases, this is the only way for the buyer to receive their products without having to pay for them up front.

There are plenty of reasons why a delivery note isn't used as payment. These include:

  • The buyer trusts the supplier but doesn't want to pay the full amount up front.
  • Payment for products is left open. There was no agreement on how much to charge at the beginning of negotiations.
  • There are too many outstanding issues about which goods were sold and for how much.
  • There are additional fees or taxes associated with the goods sold. These fees require extra payment negotiations.

Key Takeaways

A delivery note is a list of all the goods provided in a sale transaction between two parties. It  includes all formal details. They are used instead of an invoice when a client doesn't want to show how much they paid for a product or wants to keep the supplier anonymous. Hopefully this article helps you to understand delivery notes a little better.

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