Sample Vendor Advance Payment Policy

Example / Template for Letter to Purchase Department for minimizing Advace Payment to Suppliers in Word / Doc Format

July 18, 2012
Sub: Advance payment to Vendors

We have the practice of providing the advance payment to various Vendors where it is needed.

First of all, Purchase Department will try to minimize release of advance payment as far as practically possible.  Secondly, whatever commercial Invoices received by Purchase Department shall be sent to factory with a copy to Accounts Department at Head office for proper adjustment.

To streamline the system, following has been decided:

1)      The Original for Buyer copy, Excise Invoice received directly at Factory along with the material or any other documents will be intimated to Purchase department and Accounts Department at Head Office through daily Goods Receipt Advice.

2)     Accounts Department at Head Office will provide Vendors’ advance position every fortnight to Purchase Department so that they can check and arrange for required Invoice at the earliest.

3)   Factory Stores/Accounts Department will send a fortnightly report to Purchase Department with a copy to Head office Accounts regarding non-receipt of commercial Invoice against which material has already been received.

4)    Purchase Department will mention BFA (Bill Forwarding Advice) Number in their payment advice, where bills have already been received and sent to Accounts Department at Factory.

It will be the endeavor of everyone concerned that advances should be squared up as early as possible to reflect the correct position in the books of Accounts of the Company. 

R. Ramaswami                          C.N. Rao                                S.N. Nag       
Manager Factory Acct             Manager – Bank Op.           GM – Purchase

Approved by:

(N Nath)
                                                            Director - Commercials


Post a Comment