Every business must document the cashflow coming in and out of their accounts. In particular, when a business sells goods and services, there needs to be documentation that shows what was sold and for how much. This is the basic information on a sales receipt that documents each customer purchase, and it’s important both for your accounting system and tax compliance.
Sales receipt information
At its most basic, a sales receipt, backed by efficient purchasing software, documents every purchase transaction and is furnished to the customer as substantiation of payment. There are instances when a receipt is issued to document partial payments, like layaway installments or deposits for upcoming deliveries.
However, all receipts contain the following information:
- What the customer bought. This can be goods or a service. Also, the quantity of each item or time spent as applicable.
- Unit price. In other words, how much did the customer pay per item or per unit of time.
- Taxes paid, if applicable. These can include sales taxes, room and meals taxes, or anything else the government requires.
- Total amount of sale, both with tax and without (subtotal).
- Amount and method of payment
- Amount still due, if applicable.
- Receipt number. This is an internal control that you use to match transactions between bank accounts.
In other words, a receipt is the complete record of a sales transaction.
A sales receipt isn’t the only purchase-related record
Sales receipts record cash or other tender paid in exchange for goods and services and, in some cases, partial payments like a deposit or installment. However, there are other ways to track purchases before money is paid:
- An invoice indicates that there’s an amount due, such as a light bill or a cash on delivery transaction. Another word for this is a bill.
- A purchase order creates a contract where the seller provides something for a price, to be paid on delivery. Then, the seller will send an invoice when goods are delivered.
Therefore, we can see that a sales receipt is the opposite of a bill, because payment has already been made. However, in the case of a partial payment, further invoices will follow until the transaction is paid in full.