What is a bill of sale?
- By Book Keeping Pros
- Sources checked 15 Oct 2026
Definition
A bill of sale is a legal document that records the purchase of property or another asset, such as a vehicle, machine or piece of equipment. It sets out what was bought, where the sale took place and the price, and it is the buyer's written evidence that the purchase happened on those terms.
A bill of sale is most useful when a business buys a used asset directly from another business or a private seller, where there may be no supplier invoice. It typically names the buyer and the seller, describes the item clearly enough to identify it, and shows the date and the price. Each side keeps a signed copy.
In the books, the bill of sale is the source document for the purchase, in the same way a bill is for a purchase from a supplier. The purchase and the payment are entered from it, and the document is filed with the asset's other records, such as any finance agreement and repair bills. How the purchase is treated in the accounts is a question for your accountant.
In Australia
business.gov.au's glossary describes a bill of sale as a legal document for buying property or other assets, setting out the details of the purchase, where it happened and the price. Its record keeping guidance counts records of spending on your assets among what a business has to keep, and puts the usual keeping period for most business records at 5 years, counted from when you got the record or completed the transaction it relates to, whichever is later.
The same glossary defines personal property as anything someone can own other than land, buildings and fixtures, such as goods, plant, equipment and vehicles. Its guidance on choosing suppliers suggests searching the Personal Property Securities Register to see whether goods a supplier is offering are being used as security for a debt.
Worked example
| Detail | What the bill of sale shows |
|---|---|
| Buyer | The buying business, with its contact details |
| Seller | The selling business, with its contact details |
| Item | Used box trailer, identified by its serial number |
| Date and place of sale | 12 May 2026, at the seller's premises |
| Price (AUD) | 4,800.00 |
Illustrative example only: these rows show the method and are not sourced data.
Common mistakes
- Paying for a used asset without any written record of what was bought and for how much.
- Entering the purchase from memory instead of from the bill of sale, so the date or amount in the books is wrong.
- Storing the bill of sale apart from the asset's other records, so it cannot be found when the asset is later sold.
Related terms
Related service
Small business bookkeeping
Your books kept current, every month.
Sources
- Key financial terms
business.gov.au, Australian Government. Current at 15 October 2026, released 9 July 2024. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.
- Record keeping
business.gov.au, Australian Government. Current at 15 October 2026, released 7 November 2024. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.
- Suppliers
business.gov.au, Australian Government. Current at 16 October 2026, released 30 March 2026. Checked 16 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.