A receipt is a legal acknowledgment that payment was received for a transaction. You can use a receipt in your business to show you or your customer purchased goods or services. It may also acknowledge receipt of an item of value for safekeeping or other proof of a transaction.
Recording your transactions helps you manage your business and prove you made payment. You can download our sample form below or even build your own with a step-by-step process.
What is a Receipt?
A receipt is a written record of a transaction between two or more parties. It outlines the details of the purchase and includes information about it like the purchase price, date, and payment type. It is meant to acknowledge that a purchase was made for back-end records. The purpose of a receipt may also be to:
- Prove that a purchase was made
- Show who owns a warranty that came with the product
- Enable return of a product
- Tax records
- Accounting records
You should make a receipt any time you want to get or give something of value. A payment receipt lets you effectively track your purchases or sales. It also provides evidence in case of a future dispute about the purchase. Using receipts is an important way to protect your rights.
Difference Between a Receipt and an Invoice
The primary difference between a receipt and an invoice is the purpose of the document. A receipt is a document issued after payment or services are made. It is meant to document that a transaction has already occurred.
An invoice is issued before payment. It is a request for payment for goods or services that have to be rendered. With an invoice, no payment has yet occurred. There are many types of invoices that may help you request payment.
How to Write a Receipt
Writing a receipt is a straightforward process but is even simpler when using a template. This is where Legal Templates can help you create a customized receipt to fit your specific needs. When writing a receipt, you should include at least the following information:
The date of the transaction is critical information. It shows when the transaction occurred or when it was paid for. This may be crucial evidence if a dispute would arise or when determining other rights—like any right to return within a certain number of days.
2. Receipt Number
Receipts should have a unique identifying number to help separate them from other transactions. This is especially important when receipts look identical or similar between customers, but it is important for every business. This helps you keep more accurate records and better organize your financial documents.
3. Account Number and Purchase Order Number
For transactions that have identifying account numbers, this should be included on the receipt. This is common for pre-existing business relationships or long-term contractual agreements.
If the receipt is for a transaction that fulfills a purchase order, that purchase order number should also be included on the receipt.
4. Seller Contact Information
The receipt should include the identifying contact information for the seller. This should include:
- The business address
- A telephone number
- A fax number
- An email
- Other contact information if applicable
5. Billing Address and Delivery Address
This section should include the customer’s name, address, and telephone number. It should also include a section directing it to a certain individual’s attention, especially if the customer is a business.
There should be a separate section for a delivery address as well. Where the product is to be delivered may differ from the billing address. This section should also include the shipping date.
6. Description of Goods or Services
This section should include a description of the goods or services rendered to the customer. This may be for an individual item or a list of all goods or services provided. The description of goods should be sufficient to identify what was sold and purchased. It should also include key information such as:
- The quantity of particular goods sold
- The unit price for each good
- The total cost of the goods sold
This section should also include a subtotal, sales tax section, and a section related to any shipping costs. It should also include any additional costs or discounts to determine the total amount owed.
7. Payment Received
The receipt should indicate how much money was received. The total amount should identify the date it was paid and the method of payment, such as:
- Money order
- Credit or debit card
Here’s a sample of what a typical receipt looks like:
The IRS says a business should keep its receipts for three years. If a business claims any loss during that tax year, the receipts for that year should be kept for seven years.
A receipt should include important information like:
- Date and time of purchase
- Amount paid
- Payment method
- Description of items
- Shipping information
You can make your own receipt by utilizing a receipt template. By using a sample you can just fill in the blanks to make your own receipt with ease.