As a business owner, you’re most likely familiar with payment receipts since you issue them each time you complete a transaction involving cash with a client. However, if you have a brand new business, you will want to set up a receipt template that you can customize to each customer’s order. If you’re not sure what goes on them or where to get free receipt templates, we’re going to outline all of the important considerations you want to include below.
Defining a Payment Receipt
What is a receipt? In short, your receipt is a form of written acknowledgement that you transferred something of value to your customer and they paid for it. Vendors usually give their customers receipts at the end of a transaction, but it’s not uncommon to issue receipts in business-to-business dealings and during stock market transactions.
For example, a business can purchase inventory from a supplier. The supplier will give the business an itemized payment receipt that shows the items, quantities, and how much the business paid out. For customers, you issue them a receipt when they pay for your goods or services, and you can use a receipt template to make a branded one.
In addition to helping prove ownership of goods, receipts also work for other purposes. As a business, you may require a customer to show you a receipt if the customer wants to return or exchange an item. Other businesses need a receipt if the customer files a warranty claim. Payment receipts are important during tax time too because the IRS will require any business to prove certain expenses, and you can do this through saving receipts. You should generate receipts for the following instances:
- Petty cash slips for any small cash payment
- Gross receipts like deposit information for credit or cash sales, cash register tapes, invoices, receipt books, and forms 1099-MISC
- Cash register tape receipts
- Credit card statements and receipts
- Receipts from any raw material purchases. They should show the amount paid while confirming that they were all necessary purchases for your business. They could include cancelled checks or other documentation that identify who paid, the payment amount, and proof of electronic funds transfers or payments.
What Is a Receipt Template?
A free receipt template is a blank form that is very user-friendly and enables businesses to create receipts when they need them. This template will document the date the customer paid, the amount, reason for payment, and who paid your business. You want to give a copy of this receipt to whoever paid.
You can use a cash receipt template to create receipts for different needs. For example, you could have sales receipts for your business, general receipts for any type of sale, rent receipts, or an itemized one. You could use it for services or products, and you give it to whoever pays as a record of their purchase. It’s an essential part of record keeping for your business.
If you get a free receipt template, you can recycle it over and over while customizing it to include a lot of information about the payment or purchase. You should provide a receipt right after you make a sale and both parties should keep a copy for their records. A missing or lost receipt can cause a lot of problems down the line for both parties if an issue with the products or services come up.
Free Receipt Template Components
Once you have your free receipt template, you have to know what to add to it. Generally speaking, most receipts have the same core items, no matter what you give a person a receipt for. Each time there is a cash transaction, a receipt should exchange hands too. The biggest components you want to include are:
- Amount Paid – Did the customer pay the full or a partial amount? List it clearly at the bottom of the receipt, and keep the balance there too if there is one left.
- Business Information – Make sure to include the business’s information like the name and address. If it’s a custom receipt, logos, phone numbers and email addresses are also common.
- Customer Information – You want to have at least the name and address of the person who made the payment. It may be a good idea to have a telephone number too in case you need to clarify something. For big businesses, this may be someone in the billing department.
- Date – Have the date the person gave you the payment listed clearly.
- Initials or Signature – There should be a line on the receipt for the person to initial or sign after they make a payment.
- Payment Method – Most receipt templates allow you to customize different payment methods like cash, credit cards, debit cards, etc. Include the payment method.
- Payment Reason – Why did the person make a payment? Was it for specific goods or services? Each item should be on the receipt.
- Receipt Number – For filing purposes, each receipt should have a unique identifier on it. It could start like Receipt #001 for the first one and Receipt #002 for the second, and so on. This will help you pull it up later if you need it.
Why Keep Payment Receipts
When you run a business, properly storing receipts and organizing your files can streamline your operations. This is especially true for accounting and tax purposes. Keeping all of your receipts can also:
- Deductible Expense Tracking – Keeping receipts that outline each transaction a business makes will ensure you have proof to claim any and all deductions on your taxes.
- Financial Statement Preparation – You’ll need to refer to your cash receipt templates and records to prepare your financial statements like balance sheets or profit and loss statements.
- Monitor Progress – Records can help you see how your business is doing. It’ll show which items you’re selling, whether or not the business keeps improving, and what changes you should make.
- Organization – You could end up working with several vendors and have dozens of sources of expenditures and income. Receipts help you separate out nontaxable and taxable income. They’ll also help you identify your deductions.
- Tax Return Preparation – Good payment receipts will help you create a short snapshot of your year in taxes. You need to keep and organize them to get the best return you legally can.
- Tax Return Support – To back up your tax return in the event of an audit, you need proof of each deduction and write off you had. Having these documents can help you avoid fines.