A receipt is a document which is provided by a business to its customers every time a product or service is sold. It its a buyer’s proof of purchase.
Typically it will show:
the date and time of the purchase
the number of items purchased and price totals
the name and location of the business the items have been bought from
Any VAT charged
method of payment
It is usually supplied at point of sale in either paper or electronic format.
When do I need to issue a receipt?
It is advisable for a business to issue some form of receipt to all customers. This is supplied whenever a customer pays for goods or services offered by a business. A receipt could be simply signing and dating an invoice to show that it has been paid.
A receipt is also important documentation for maintaining your business records and preparing your tax returns, so it is vital you keep copies of these filed away safely.
What information must I put on a receipt?
If you sell a product or service the receipt you provide to your customer should contain the following:
your company’s details including name, address, phone number and/or email address
the date of transaction showing date, month and year
a list of products or services showing a brief description of the product and quantity sold
the amount of the transaction with the total amount broken down down to show the net amount, VAT (if VAT has been added) and any discounts
the method of payment – ie cash, credit or debit card etc.
There are various ways a receipt can be issued. A receipt can be issued on paper or electronically. It can be handwritten or typed.
Many small cash register contain built-in printers for producing receipts. They also have software that allows you to programme tax rates and codes straight into the register, so all the calculations are done automatically.
Also, digital receipts are an option – this method of supplying a receipt is becoming increasing more popular. Once produced, the receipt is emailed straight to the customer. Pre-accounting tools such as Receipt Bank offer this option and are free to trial. It’s a good choice if you’re looking to reduce the time you spend on admin.
If you don’t have software to produce a digital receipt, then a handwritten receipt will work just as well. A receipt book can be purchased easily from a stationers and usually offers two copies per receipt (one for the customer, the other for your records). Alternatively, there are plenty of receipt templates available online that you can download to use or you can create your own template from scratch, in Microsoft Word for example.
Do I need to keep a copy of all receipts?
It is advisable to keep records of all receipts for the same length of time as other business documents are retained (which is a minimum of six years).
If your business is registered for VAT you will need a copy of a valid VAT receipt when you come to claiming back the VAT.