It’s essential to record the sales you make for your business. Receipts prove the goods or services you have exchanged for money. Without receipts, you risk the buyer, seller, and your business being unable to prove a transaction has taken place.
This article will uncover what a receipt is and why proof of payment is necessary. You'll also be provided with receipt examples and how to make a receipt.
A sales receipt acts as a transaction record. The seller issues a receipt when a sale is made to verify the amount paid by the buyer for the provided product or service.
Businesses often use receipts for stock management and tax calculations (such as payroll or corporate income taxes). Customers may use them for accounting purposes or reimbursements.
Just as consumers receive receipts from service providers or suppliers, businesses value receipts in business-to-business dealings and Australian FTSE 100 (ASX) transactions.
For example, a business which holds a futures contract might receive a delivery instrument that acts as a receipt for that contract. When the futures contract expires, this delivery instrument acts as a receipt that the business can exchange for the underlying asset.
A receipt will often include the following:
Here are some reasons why receipts are issued following purchase.
The seller generates the receipt automatically via a cash register. However, in some circumstances, the seller manually produces the receipt.
There are several types of receipts. Whether physical or digital, sales receipts fulfil the same purpose. Here are the different receipt types:
A cash register receipt is a printed slip of paper you usually receive when making a purchase. You may recognise this type of slip from your regular grocery store purchases.
Service providers outside the retail environment may offer you this type of receipt. For example, an electrician can provide you with a handwritten receipt after fixing some wiring/socket outlets in your house.
Online retailers send out both an email receipt and delivery notes that you’ll find in the package you ordered. The delivery note will contain additional information like the returns policy.
This receipt is created while writing out the handwritten receipt. Receipt notebooks have a carbon layer behind every receipt page. This allows the receipt to be traced onto the layer underneath for the seller to keep.
Receipts are also necessary so that businesses have documentation of certain expenses. That's why certain types of receipts can be generated for small businesses to retain so that they may keep track of their operations. Some include:
Below is an example of how a sales receipt should look. All receipts should include the provided product, total amounts paid and the date that payment was made.
Receipts are essential for all businesses. This is because they help to establish complete and accurate record keeping. Receipts allow businesses to keep track of all their expenses and be used as necessary documentation for tax audits.
A record of past business expenses also helps the company to plan for the future. This is useful for Small to Medium Enterprises (SMEs) trying to find their way in the market. Gross receipts tax also helps businesses create budgets based on these past expenses.
Accurate record keeping will allow you to track your company's financial performance, create financial statements with ease, record your deductible business expenses, and prepare tax returns.
Did you find this article helpful? You can find many more informative articles on the QuickBooks blog. Check out our other articles on an invoice and the differences between a receipt and an invoice.
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