Obviously, we all have seen a receipt. We have them whenever we purchase goods and/or services from a store. Receipts are usually given every time we have completed a transaction of any kind. Let us take for example when depositing money in the bank. The bank teller issues the depositor a deposit receipt when the transaction has been completed.
For ordinary people, a receipt is just an addition to their trash to throw. While they do not often give so much importance on the receipt of their purchased item, but for business people, these sheets of paper are extremely important in their business, especially during the filing of tax returns. That is why it important to organize receipts at all times.
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Why Do We Need Receipts in Our Everyday Lives?
Since this article is all about receipts templates, it would be right to know the definition of the term since there are a lot of people who often mistaken it as an invoice. According to Wikipedia, a receipt “is a formal written acknowledgement that a person or customer has received money or property in payment following a sale or other transfer of goods or provision of a service.”
It is important to know that it is different from an invoice in so many levels because a receipt is issued after the payment is made, while an invoice is used to request payment from the customer. But why do we really need receipts? Here’s why:
- A receipt is a document that proves a customer has settled his or her payment of a particular good or services.
- It keeps track of the total amount of cash earned either on a daily, monthly, quarterly, or yearly basis.
- It helps to effectively verify the correctness of the business organization’s cash book.
- It is a valuable document that is used to determine tax returns.
- It is commonly used whenever the customer wants to return or exchange a purchased item.
- It is necessary for the business’ internal accounting.
You may want to check out more receipt formats in Word for easy-to-edit file samples and download them from our website.
Key Elements of Receipt
Whenever a customer purchased a good from you, you will be required to make a receipt that contains the following key information:
- The vendor details must include the name, address, contact number of the seller or company.
- The vendee details should include his/her name. Some receipts have address and contact information fields.
- The date of transaction should include information such as the month, day, and year the purchase was made for tax purposes.
- The product details should briefly describe the goods or services sold. Information to include are the name of the product, quantity, product number, and others that would uniquely identify the product.
- The transaction amount should be broken into the original price, discounts (if any), and the tax imposed on the the item.
- The payment method should identify whether the customer is paying via cash, debit/credit card, or check.
Do not also hesitate to browse our website’s collection of invoice receipts for other references.
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How Keeping Receipts Can Benefit Your Business
It is highly important for businesses to keep a record of their receipts. Here are a few good reasons when you should keep receipts and not toss them in the trash bin (for businesses):
- Keeping the receipts handy can make the process of filing for tax returns a lot easier. Not keeping and organizing can potential put your tax return into peril.
- It makes account preparation quicker.
- It is great tool used to identify your business’s strengths and weaknesses.
- It protects your business for over/under tax payments
- It reduces the headache during the distribution of profits to shareholders or determining losses that have to be shared.
- It helps determine the liability of the business organization for VAT payment to HMRC
- You will be able to easily apply for loans or sell your business.
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Dangers of Using Thermal Paper Receipts
Thermal papers are used in receipts nowadays. There is no ink used in printing because this type of paper uses chemicals and heat transfers to print the details on the receipt. Although this is a practical way to save money, the details printed on the paper will soon fade away, leaving the paper completely blank.
Although you may have saved a great deal amount of money, this practice can be extremely dangerous to businesses. Without the details on the receipts, it would be impossible for the IRS to verify the total business expense. So how can you avoid it? We would recommend to download our free receipt templates so you could properly file your business’s revenues..
Preserving the Details on Your Receipts
- If you’re planning to keep the receipts in a storage box, make sure that when you fold it, the print should be on the inside.
- Don’t waste time and make digital copies of them as soon as possible.
- When handling the receipt, make sure not to touch the details except the edges.
- Avoid using highlighters or taping the receipts as it would make the print disappear.
- Keep the receipt away from heat or cramming them in your pockets.
You can also download and use the service receipts from our website to help guide you throughout this process. Don’t forget to check out our website’s business archives for more business templates.
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Types of Business Receipts
- Gross Receipts – Shows the total amount earned by the business organization during its yearly accounting period.
- Donaton Receipts – It is used to document that a payment has been made for a particular charity.
- Sales Receipt – This is probably one of the most common types of receipts known to customers. It is a proof of purchase issued to the customers after paying/purchasing goods and/or services.
Now that we have reached the end of this article, we hoped that you have learned so much about the importance of a receipt in businesses. But before you leave, we would like you to visit our website, Template.net, and download our printable receipt templates and/or cash receipts.