How to Write a Receipt? A Guide for Small Businesses

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Are you facing issues with managing customer payments or tracking business sales?

If, yes then you must start writing a receipt. 

With a professional-looking receipt, you can streamline the entire business process. Maintaining a clear transaction record that benefits both you and your clients.

In this blog, we’ll guide how to write a receipt and make it precise, professional, and effective for your business.

Let’s start.

What is a Receipt?

A receipt is a printed document that serves as proof that goods or services have been exchanged for payment.

This business transaction record is also known as proof of purchase. The customer can use it to showcase the amount paid for a product or service. The receipt includes other details like the date and time of the transaction and payment method.

Generally, it is not required federally to issue a receipt for products or services in the United States. However, businesses need to keep records of all transactions for state sales tax purposes and financial reporting.

Now that you know what a receipt is, let’s clear up any confusion between sales receipts and invoices! Although they might seem similar, they actually serve different purposes in a business transaction. Understanding these differences will help you use the right document at the right time!

What are the Differences Between Sales Receipts and Invoices?

Here are the key differences between sales receipts and invoices:

FeatureSales ReceiptInvoice
PurposeConfirms payment has been madeRequests payment for goods or services
Issued whenAfter payment is receivedBefore payment is made
Key informationDate, amount paid, method of payment, transaction detailsDate, amount due, payment terms, itemized services
Payment statusPayment has been completedPayment is still pending
Customer obligationNone, since payment is already settledThe customer is expected to make a payment
Use caseUsed for immediate purchases or servicesUsed for deferred payments or credit terms
Common usersRetail businesses, service providers (instant payment)Freelancers, contractors, and businesses with terms
Legal requirementRequired for record-keeping and returnsRequired for requesting and tracking payments

Now that you have understood the major differences between sale receipts and invoices. You should also have a look at invoice vs receipt to know the differences between a general receipt and an invoice for a better understanding of both concepts.

 

Want to create clear and professional receipts?

Download our free receipt template from InvoiceOwl to write accurate receipts for your business.

A Step-by-Step Guide to Write a Receipt

A well-prepared receipt helps to maintain the accuracy of financial records and compliance with legal standards.

Follow these 8 important steps to create clear and professional receipts that build trust and simplify accounting.

Step 1: Download a receipt template

Start by searching for free receipt-generating tool available for creating professional-looking receipts. Use them and download the most suitable receipt for your business. After downloading the receipt, fill in the important details, like your organization’s name and additional information.

Step 2: Write the receipt number and date

Ensure to write the full date when the sale was made. Also, add the receipt number to track the sales throughout the day. Remember to start the receipt number with 001 and then keep adding the number for each receipt.

Write the receipt number and date

Step 3: Add organization name and contact details

Add the organization’s name, contact details, and the address. Besides this, you can also add other important details like social media accounts, websites, and working hours. This information will act as legal proof that your company made the sale and allow customers to contact you if needed. In a situation where you don’t have a company, you can write your name instead.

Contact details

Step 4: Add the items purchased and their cost

Ensure to add the purchased items on the left side of the receipt template and the costs associated to them on the right side. After selling more than one time, make a proper list of the items and the costs in a row.

Example:
Foundation Laying (Concrete)……….$6,800.00
Framing and Structure Setup…………$7,500.00
Electrical Wiring Installation………….$2,300.00

items purchased and cost

Step 5: Add the subtotal below all of the items.

The term Subtotal refers to the price of all the products before adding the taxes and additional fees. Make sure to add the cost of each item sold by you and mention the total amount of the items.

Example:
Foundation Laying (Concrete)……….$6,800.00
Framing and Structure Setup…………$7,500.00
Electrical Wiring Installation…………$2,300.00
Subtotal……………………………….$16,600

Subtotal

Step 6: Add taxes and other charges

Now it is time to add the sales tax or any additional charges on the receipt’s left side and add the prices on the receipt’s right side. Once done, add other applicable fees to the subtotal and get the final amount to be paid by the customer.

Example:
Sub total…………..$16,600
Sales Tax………….$500
Grand Total…………$17,100

Add taxes and other charges

Step 7: Mention the payment method

Offer various payment methods like cash, check, or credit card. Handover the original receipt to the customer via mail and have an extra copy of the receipt for your records.

Step 8: Use a POS system for receipt management

With the help of a POS system, you can track your business expenses, sales, and receipts and process payments like credit cards, and checks. This system is capable of generating a receipt automatically for the customer at the point of sale and adding that sale to your main database. Ensure to try different POS systems and then pick the one that suits your specific business needs.

Embrace the future with paperless receipts

Opt for digital receipts as they eliminate the need for a receipt book, and reduce waste. With digital receipts, you can save the environment and make your business more sustainable. Last but not least, it will help you save a lot on printing costs and also appeal to your environmentally conscious customers.

What is the Importance of a Receipt?

Receipts are essential for accurate record-keeping and financial planning, ensuring compliance with state-specific regulations.

Here, we are going to discuss the top 5 significances in detail:

1. Returns and exchanges

With the help of receipts, it becomes easier to issue returns or exchanges. It acts as a clear record of the product purchased and accounts for the same. They ease the process of returns for the stores and refunds or replacements for the customers.

2. Track sales

Sales receipts come in handy to track the products or services that are mostly purchased by your customers. With this information, you can customize your services to meet the specific requirements of your targeted customers.

3. Tax compliance

Receipts are important for both individuals and businesses in the tax season. It enables to ensure that all the transactions are accounted for properly in the financial statements. With the help of accurate receipts, you can easily handle sales tax calculations and ensure compliance with IRS regulations.

4. Budgeting and accounting

With the help of receipts, you can manage your finances by tracking your spending. Receipts act as legal records for reconciling bank accounts, tracking cash flow, and aligning expenses with budgets. They are extremely important for maintaining accurate and updated financial statements.

5. Customer satisfaction

A professional receipt adds to the transparency of the transaction, which leads to building trust with clients. It showcases the A professional receipt adds to the transparency of the transaction, which leads to building trust with clients. It showcases the authenticity of business operations and the values it brings out for customers. A cash receipt provides detailed and complete documentation of their purchase.

 

Want to impress your clients with professional receipts?

Start creating customized and professional-looking receipts with InvoiceOwl.

Enhance Your Business with Organized and Accurate Receipts

Writing receipts is one of the most important steps to maintaining accurate financial records for both individuals and businesses. A professional-looking receipt ensures transparency and also acts as proof of transaction in future business operations.

No matter, if you are a freelancer or a small business owner like a contractor, electrician, or plumber, having a detailed receipt will help in building trust with the clients. Additionally, it also helps track transactions and organize overall financial records.

Several tools like Google Docs, Google Sheets, and receipt software like InvoiceOwl are available for creating professional receipts. Additionally, InvoiceOwl enables businesses to go 100% paperless and automates invoice and estimate generation. Last but not least, these invoicing tools will boost your business’s operations and improve your financial management.

Frequently Asked Questions on How to Write a Receipt

  1. Which software is the best for creating digital receipts?

    Various tools like InvoiceOwl and QuickBooks are available to create perfect professional digital receipts. These tools can be of great help for creating receipts along with tracking sales, managing payments, and integrating with different accounting software.


  2. Is it valid to create a handwritten receipt?

    Yes, the hand-written receipts are valid in the US. However, opting for digital receipts will reduce paper clutter and simplify your record-keeping process. A digital receipt can be stored easily and used for taxation purposes without any hassle. Last but not least, it has a lesser impact on the environment.


  3. What payment methods can be added to a receipt?

    The most common US payment methods are cash, debit/credit cards, checks, and electronic payments like PayPal or Stripe, and ACH transfers. Always remember to specify the payment methods used for every transaction in the receipt.


  4. How long should one keep receipt copies for tax purposes?

    As per the guidelines from the IRS, businesses should safeguard their receipts and records for at least three to seven years to support income and expense reports in case of an audit.


  5. Are digital receipts valid instead of paper receipts?

    Yes, most of the US-based businesses are opting for digital receipts sent via mail or just app-based solutions. When compared to hand-written receipts, digital receipts are legally acceptable and convenient for both organizations and customers.


  6. Is it necessary to add tax information on a receipt?

    Yes, if applicable the receipts must list the sales tax separately or maybe add it to the statement that states prices are tax-inclusive.


  7. What to do if a customer requests a replacement receipt?

    Suppose, a customer loses the receipt, you can offer a duplicate receipt as long as you have the transaction record. Ensure to mention clearly – “Duplicate Receipt” to avoid confusion.

Author Bio
Jeel Patel
Jeel Patel
Founder

Jeel Patel is the founder of InvoiceOwl, a top-rated estimating and invoicing software that simplifies the invoicing and estimating processes for contractor businesses. Jeel holds a degree in Business Administration and Management from the University of Toronto, which has provided him with a strong foundation in business principles and practices. With understanding of the challenges faced by contractors, he conducted extensive research and developed a tool to streamline the invoicing and estimating processes for contractors. Read More

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