Office Procedure – JSS2 Business Studies Lesson Note (Third Term)

Office procedure, or office system, is the sequence of steps or operations in which activities are performed in an office.

Behavioural objectives

By the end of the lesson, students should be able to:

1. define office procedure and office manual;
2. state the importance of office procedure;
3. give examples of office procedures;
4. list the steps for preparing an invoice;
5. explain payment terms such as NET 15, NET 30 and “Due on Receipt”;
6. state the methods of payment shown on an invoice.

What is office procedure?

Office procedure is the ordered series of steps used to carry out a task in an office.

• Purpose: every worker does the task in the same agreed way.
• Another name: office system.
• Example: the steps a clerk follows from receiving an order to sending an invoice.

What is an office manual?

An office manual, also called a procedure manual, is a book that contains a summary of all the activities in an organisation.

• Who produces it: every organisation produces its own manual.
• What it records: the steps for each task and the forms to be used.
• Who uses it: new and existing staff who need to check how a task is done.

Office procedure and office manual compared

• Office procedure: the steps followed to do a task.
• Office manual: the document in which those steps are written down.

Why is office procedure important?

Office procedure is important because it makes office work faster, cheaper and better organised.

• Lower cost: it reduces the general cost of operation.
• Easy training: it allows for easy training of new staff.
• Better performance: it improves the performance of existing members of staff.
• Smooth work flow: a good office procedure helps work to flow better in offices and departments.
• Better coordination: it brings about better coordination between staff and departments.

What are examples of office procedures?

Examples of office procedures are the routine tasks that every office carries out.

• Handling incoming mail: receiving, opening, sorting and passing letters to the right person.
• Handling outgoing mail: writing, signing, packing and posting letters.
• Filing: storing documents in order so they can be found quickly.
• Receiving visitors: welcoming, recording and directing people who come to the office.
• Preparing invoices: asking customers to pay for goods or services supplied.

What is an invoice?

An invoice is a document a seller gives a buyer, showing the goods or services supplied, the amount to pay and when to pay.

• Invoice: asks the customer to pay.
• Receipt: proves that the customer has paid.

What are the parts of an invoice?

• Seller’s details: company name, address, email address and phone number.
• Invoice number: a unique number for that invoice.
• Date: the day the invoice is prepared.
• Description: the goods or services supplied, with quantities.
• Subtotal, tax and total: the amounts that lead to the final cost.
• Payment terms: when payment is due.
• Payment methods: how the customer may pay.

How do you prepare an invoice?

To prepare an invoice, follow these eight steps in order.

1. Write your contact information. Write or type the company’s contact details on a sheet of paper, spreadsheet or other electronic record-keeping system. Include an email address and phone number so customers can ask questions.
2. Create a unique invoice number. Use letters, numbers or both. It can be as simple as “Job-001” or more detailed, such as “Smith-Job-001”. The second type suits repeat customers because it carries their last name and a job number. Later invoices should have unique, sequential job numbers, which makes sorting the client’s job history easier.
3. Date the invoice. The sooner you invoice clients, the sooner you can get paid.
4. Describe the work you performed. Use separate lines to itemise each service or product. Give the type and quantity of materials used. Service providers should state the scope of the work and the hours spent on each part.
5. Find the subtotal. Add up the total quantities of each material, product or service provided.
6. Add the tax to find the final job cost. Add the sales tax (in Nigeria, usually VAT) to the subtotal. Put the final figure at the bottom of the invoice. Write the figures in clear, bold type so customers know exactly how much to pay.
7. Indicate payment terms. State when you want to be paid. Examples are NET 15 or NET 30. If you want payment when the customer receives the invoice, write “Due on Receipt”.
8. Tell customers how to pay. State the payment methods you accept, such as cash on delivery (COD), cash, cheque or credit card.

What are payment terms on an invoice?

Payment terms are the part of an invoice that tells the customer when payment is due.

What are the methods of payment?

Methods of payment are the ways a customer may pay the amount on an invoice.

• Cash on delivery (COD): the customer pays in cash when the goods arrive.
• Cash: the customer pays with notes and coins.
• Cheque: the customer writes a cheque for the bank to pay the seller.
• Credit card: the customer pays with a card, and the card company settles the seller.
• Bank transfer: the customer sends money directly to the seller’s bank account.

Evaluation

1. Define office procedure.
2. What is an office manual?
3. State four reasons why office procedure is important.
4. What does “NET 30” mean on an invoice?
5. Why is it useful to include a customer’s last name in the invoice number?

Assignment

List the steps for preparing an invoice in the correct order.