A key part of running your own business is keeping a record of any and all sales you've made. Receipts provide proof that the goods or services you provide have been exchanged for money. Without receipts, you run the risk of the buyer, seller, and your business being unable to prove that a transaction took place.
In this article, you will learn what a receipt is, why proof of payment is necessary, and what a receipt looks like as well as how to make one.
A sales receipt acts as a record of a transaction for both a seller and a buyer. A seller will issue 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 inventory management and tax calculations, such as payroll or corporate income taxes. Customers may use them for accounting purposes or if they need to be reimbursed.
Just as consumers receive receipts from service providers or suppliers, businesses value receipts in business-to-business dealings and stock exchange transactions.
For example, if a business holds a contract they might receive a delivery instrument that acts as a receipt for that contract. When the 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:
Receipts are important for both the buyer and the seller because they can be used to:
The seller will typically generate a receipt automatically via a cash register, however, there are some instances in which the seller will manually produce a receipt instead.
Though there are several types of receipts, whether physical or digital, all sales receipts fulfill the same purpose. The different receipt types are:
A cash register receipt is a printed slip of paper usually received after making a purchase. You may recognise this type of slip from your regular grocery store purchases.
Some service providers, typically outside the retail environment, may provide this type of receipt. For example, an electrician may provide you with a handwritten receipt after fixing some wiring/plug outlets in your house.
Online retailers will often send out both an email receipt and a packing slip. The packing slip will contain additional information like the returns policy and you'll typically find it in the package you've ordered.
This receipt is created alongside the handwritten receipt. Receipt notebooks have a carbon layer behind every receipt page, allowing the receipt to be traced onto the layer underneath for the seller to keep.
Receipts are necessary so businesses have documentation of certain expenses. Which is why certain types of receipts can be generated for small businesses to retain so they can keep track of their operations.
These types of receipts include:
