Sales Receipt

Types of purchase orders

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.
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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.

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