How to Create a Construction Receipt?
Every payment given to a construction company corresponds to a work completed. To give both the service provider and its client a proof of the payment, receipt document should be made and kept. In Recordkeeping Is Essential to Your Business by S.H. Block Tax Services, it has been highlighted that receipts play vital roles in thoroughly preparing financial statements. For this reason receipts, receipts prepared with all crucial details help in the future reporting your profit and loss statement, as well as balance sheets. Be guided in creating your construction receipts by taking note of the succeeding steps.
1. Make Your Receipt Official
Considering that receipts are used mainly as proof of payments, it is necessary to make such a document accredited. This is to reassure both your company and your clients of its validity. The first thing to do to make it official is by instilling your company details, including your company name, company address, as well as contact information like phone number and email address. Though it is not necessary, putting your company logo could enhance the receipt’s authenticity.
2. Include the Payer Information
As mentioned above, receipts are for the record management that benefits both the payers and the payees. Like so, receipts should encompass the payers’ basic pieces of information. Incorporate the payers’ name, address, and contact number. If the payer is a representative of a certain organization, then they have the choice to let you input their organization’s details instead.
3. Put the Receipt Number and Service Attendant
Printed documents can be easily faked and used fraudulently. To avoid becoming a victim of these dishonest deeds, you need to seal your receipts with a number that correlates with your record management organizer. If you do not have such software, then imprinting the name of the person who is in charge of making and giving you the receipt should do the job the same. Then again, having both would be better.
4. Determine What Are Being Paid
Construction firms are paid not just for their services. Many construction businesses, too, focus more on providing materials, tools, supplies, and heavy equipment. Whichever products or services are being paid, you should have them tallied completely.
5. Register and Calculate
After the inclusion of the paid construction items in your document, their equivalent prices should be taken into account. Aside from that, the number of units and total costs are required to be instilled as well. Once all of these are done, you have got to compute the total costs.
6. Seal the Deal
A list of items and their corresponding costs have been successfully calculated. So, what’s next? Finalize the payment transaction by filling the involved parties’ names and marking them with their respective signatures.
What is a Construction Receipt?
Construction receipts hold all the necessary charges a client is charged for a particular construction project or service. A contractor has to issue and it records details of the parties involved in the service contract, project or services details, unit price, total price, signature, etc.
What is the Purpose of Construction Receipt?
- It helps to acknowledge the payment made.
- It informs both the party of the service charges.
- It breaks down all the service charges and makes its communication easier.
- It helps in the accounting and financial management process of the construction company.
What to Add in a Construction Receipt Document?
- Name and contact details of the construction company and the client.
- Description of the services.
- The duration of the chargeable service.
- Receipt number.
- Service individual charges.
- Purchase and labor cost.
- Total costing.
Does a Contractor Need to Show a Receipt?
There are two situations of such document requirement. You have to provide it if you, as a contractor, work on a basis of material or time with a fee. If you are completing the tasks assigned on a fixed and set price, there is no need to show this document.
What Does Progress Payment Mean in Construction?
In construction businesses, it refers to the partial payment of the works and services that have been completed till the time of invoicing. These payments are structured with billing by stage or invoicing by the percentage of completion.