Although both involve selling, service companies are certainly different from goods companies. That’s why the transaction examples for both are also different, although there are similarities.
As the name suggests, a service company is a business that provides services to its customers without producing physical products that can be seen or touched.
Service companies can cover a wide range of areas, such as consulting, healthcare, transportation, and education. Therefore, these types of companies focus on the experience and expertise they offer to customers.
Read this article to the end to find out what examples and evidence of service company transactions are.
Characteristics of Service Companies
To better understand service companies, here are some of the main characteristics of these companies.
- Intangible. The products provided are services that have no physical form. Therefore, customers cannot see or touch the services provided, but they can feel their benefits.
- Variability. Unlike the quality of goods, which can be uniform or more or less the same, the quality of service can vary depending on time, location, and the individual providing the service. This makes each service provided a unique customer experience.
- Customer Involvement. When using a service, customers can play an active role in determining the final outcome. For example, with makeup services, customers can provide input on the desired final look.
- Cannot be saved. Because services are intangible, the services customers receive cannot be stored. However, some services can be stored, but not in physical form. For example, consultation results can remain with customers for a long time, but are not in physical form.
Also read: Customer Satisfaction: Factors and Indicators You Need to Know
Example of a Service Company Transaction
Transactional activities generally involve money as a medium of exchange and payment, which are carried out based on mutual agreement. Here are some examples of transactions commonly carried out by service companies.
1. Purchase Transaction
This transaction involves purchases made by a service company. Purchases are generally for goods that are components of the service provided.
For example, a travel service company will purchase a travel car, car accessories needed for the comfort of the car, as well as items needed to fill the office or shuttle, such as tables and chairs, air conditioning or fans, and computers.
Purchases may involve immediate payment or credit payment, depending on the agreement with the seller.
2. Sales Transactions
In addition to purchases, there are also sales transactions, also known as revenue. Since this is a service company, the services sold generate profit and are counted as revenue.
Every transaction involving the sale of services or income earned must be recorded in the company’s books, whether cash or credit income.
3. Loan or Debt Transactions
In this transaction, a service company will borrow money from another party for various purposes, most commonly to increase its capital. This is also known as corporate debt.
The transaction is made with a promise to repay the amount within a specified period, including interest. Therefore, the amount repaid is higher than the amount borrowed.
4. Accounts Receivable Transactions
When providing services, companies may offer customers flexibility to pay on credit or overtime. This is known as a receivables transaction.
This transaction must be properly recorded in the books, along with the payment date and payment period that have been mutually agreed upon.
5. Expense Payment Transactions
As the name suggests, this transaction covers all expenses incurred by a service company. For example, installments for purchased equipment and bills due within a specific period.
For example, a salon business needs to pay for electricity, water, and WiFi every month, as well as installments for the business premises and other salon equipment.
6. Investment Transactions
This transaction involves placing funds in an asset for a certain period of time, with the aim of gaining profit or increasing value over time.
If part of the business capital is obtained from investments by other parties, ensure the transaction is repaid within the agreed timeframe. If investors are promised a profit share, be transparent and detailed.
Additionally, service companies can invest in property, stocks, bonds, or other financial instruments to increase future profits.
7. Barter Transactions
This transaction occurs when services are exchanged without using money as a means of payment. It can be exchanged for other goods or services of equal value.
Barter is the oldest form of trade, and it’s making a comeback among many business owners. An example is the endorsement system.
Nowadays, many service providers are collaborating through a barter system. For example, makeup artists (MUAs) offer makeup services to influencers in exchange for exposure through Instagram Story posts.
Also read: 15 Promising and Profitable Service Business Ideas in 2025
Proof of Service Transaction
Even if the transaction is in the form of a service, there must still be physical evidence that the company or business owner can retain. Here’s a list.
- Salary slip. Proof of employee salary payment.
- Giro Bill Evidence. A letter of instruction to transfer money from a customer’s account to the recipient’s account, whose name is listed on the giro bill.
- Check Proof. Payment order from a bank account to the check holder or the name stated on it.
- Cash Out Proof. Proof of expenditure or payment transactions, such as employee salaries and purchases of goods.
- Cash Receipt Proof Proof of cash receipt transaction.
- Proof of Receipt. Proof of receipt of money made and signed by the recipient of the money, then submitted to the party making the payment.
- Memorandum Evidence. Evidence to record transactions that occur internally in the company.
- Cash Note Proof. Proof from the seller to the buyer when making a cash payment, with the original sheet given to the buyer and the seller keeping a copy.
- Proof of Asset Transfer. Proof when transferring assets from one branch to another.
- Proof of Bank Statement. Evidence that banks create for their customers, containing every cash transaction that occurs.
- Bank Deposit Receipt. A transaction record from a bank to a company used when depositing money into the bank.
That explains examples of service company transactions and their forms. If you need help managing your various business transactions, simply use the Labamu app.
There are various features here that can help, such as Reports that provide complete and easy-to-understand sales reports, Bills that provide deposit and installment options, Accounts Payable to ensure that accounts payable and receivable are recorded clearly, and many more.
Come on, download Labamu on Google Play or the App Store and experience its best features firsthand!
