Free Business Receipt Templates and Examples – Word | PDF

The process of issuing invoices and providing business receipts as documentation for a sale and full payment has been around for many centuries. The business receipt comes in many forms and has evolved throughout the years regarding format, their purpose, and how they are used by various parties.

In modern times, the business receipt is often used to provide evidence that you bought something, paid for it, and own it. Receipts cover services provided, materials processed and delivered and goods purchased at a store. Receipts also demonstrate to third parties that there was an exchange of money and the transaction is complete.

The IRS is also very interested in reviewing receipts during audits. Properly documented receipts for services, goods, or materials paid can make a huge difference in the income tax assessment delivered to a business by the IRS.

Let’s dig a little deeper about what a business receipt is.

What is a Business Receipt?

The business receipt is a record between two parties reflecting a payment, the remaining balance if any, the goods or services provided, and the date of the payment. It acknowledges that the payment has been made and received.

Receipts can be issued and printed on paper or they can be sent electronically and printed by the receiver for their records. Most accounting firms and the IRS accept electronic records for records of payment.

A receipt is only issued once your customer has paid. The receipt can be for the full amount owed if they have paid in full or it can be for a partial payment and will reflect the partial payment plus the balance remaining. If the customer has postdated the payment, the receipt can also reflect the post-dated amount which, is subject to confirmation that the money has been transferred.

Why use Business Receipts?

Business receipts are used and needed for a variety of reasons. First and foremost, it is a record of payment between two parties for services or goods provided. If there is any payment dispute, the receipt is evidence that payment was made and received by the parties. Never issue a receipt until payment has been made and the funds are in your account.

Other reasons, business receipts are used include the following:

  • They document the flow of funds for record-keeping and the calculation of sales taxes, state and federal taxes owed at the end of the year, and also the quarter if quarterly payments are required.
  • Many retailers require the customer to have a valid receipt to return an item or exchange it for something different within a specified time frame.
  • Business receipts are also used as records to support warranties on products needing repairs.
  • Business receipts in aggregate also support the company’s financial reports prepared by accounting on a monthly, quarterly, and annual basis for owners and shareholders.

Note: copies of receipts must be retained for 3 to 7 years depending on state and federal requirements. Many receipts are printed on thermal paper which tends to fade over time. For this reason, many businesses retain electronic copies of all business invoices and business receipts. It is strongly recommended that the electronic databases containing this information are routinely backed up and backup copies are stored in separate physical locations.

Essential Elements of a Business Receipt

The format and content of a business receipt can vary a great deal since there is no standard required by law, however, there are basic data points that the customer and the IRS require to make a business receipt valuable and authentic as a document.

The receipt can be a handwritten note or a complex document with all of the same information as an invoice indicating payment or the original invoice stamped PAID.

The basic information on a business receipt should include the following”

  • Date of the payment
  • Seller information
  • Buyer information
  • Tax tracking numbers
  • How it was paid – cash, check, credit card, money transfer
  • The amount paid
  • Balance owing if any
  • Invoice tracking number if available
  • Goods or service paid for if no invoice is available
  • Return or exchange information if applicable

Business Receipt Templates & Examples

How to Write a Business Receipt?

Preparing a business receipt can be completed in several ways. The receipt can be handwritten; however, this is not recommended due to the need for copies and records that need to be retained. Most bookkeeping programs have features that help to generate invoices as well as receipts. Business owners can also use a template created in Word or Excel or downloaded from a site online. In some cases, business owners simply stamp the invoice, “Paid in Full”, when issuing a receipt.

Those that plan to create their own template or use one they find online should ensure that the following information is included on the receipt:

(Company or Institution Issuing Receipt)

(Full address and)

(Email)

(Phone number)

(Date)

(Receipt #) (Original invoice number)

(Company, Institution or Individual – The Payee)

(Full address and)

(Email)

(Phone number)

Summary of goods or services provided

(Quantity) ( description of goods or services provided) (Unit Price) (Total)

{Repeat as many lines as needed}

Subtotal – (Subtotal) {Total of all lines above}

Tax Rate – (Tax Rate) {Local Sales Tax Rate}

Tax – (Tax) {Tax applied to subtotal above}

Total Amount Due – (Total Amount Due) {Addition of the tax and the subtotal}

Terms – (30 Days) {Only include this line if you are extending credit to the client on the invoice and offering them up to 30 days to pay the amount on the invoice}

Amount Paid – (Amount Paid) {Show the amount actually paid by the client}

Balance Owing – (Balance Owing) {if paid in full, the balance is zero, otherwise show the balance remaining}

Payment Method – (Credit Card Number) ( Cash) (Check #) (Other – ____)

Authorized Signature – (Signature)

Title – (Title of Person)

Invoices vs. Business Receipts

Invoices and business receipts can be confusing, especially when they are used interchangeably in various situations. An invoice is usually given to a customer requesting payment. Many business owners extend credit to their clients and indicate on the invoice they have as much as 30 to 45 days to make a payment. The invoice covers materials and services you have completed and delivered to the client. In some situations, payment is expected immediately and the invoice will reflect payment by credit card or some other means. In this situation, it is an invoice and a receipt.

Several illustrations should help to clarify the differences.

Most people are familiar with purchasing at a store for materials. The cashier rings up the total charges and presents you with the amount you owe. In most cases the details are displayed on the screen in front of you, however, in a restaurant, for example, you are presented with a bill or invoice for the food you have just consumed. You are expected to pay immediately and once you have paid, often by credit card or debit, the store or restaurant presents you with a business receipt showing the details of the payment – –the amount, date and time, the name of the restaurant, etc.

Companies that provide materials and services may send an invoice for the goods and services once they have been delivered to the customer. The agreement between the customer and the provider is that an invoice will be issued once the services etc. have been delivered. The invoice will provide all of the details including the terms of payment – immediate, 30 days, 45 days. Once the client has paid for the services and materials, which could be 30 or 45 days after the invoice was issued, the company providing the services, etc. can issue a business receipt indicating the amount paid in full or in part if all fees have not been paid.

Digital Receipts: IRS Requirements

A business needs to retain copies of business receipts for several reasons. The first is to support customers claiming warranty service for something they have purchased. The receipt records the date the item was purchased, the item purchased and the amount paid.

The other major reason to retain copies of receipts is to support income tax reports to the IRS. The IRS requests businesses to save receipts for three years for a profitable business and seven years for a business claiming a loss. In most cases, a business will save its receipts for the full seven years to support audits by the IRS.

Physical receipts are provided to customers if they make a request or do not have an electronic address to send the receipt to. Paper receipts are often scanned and stored for the required duration defined by the IRS. Electronic receipts are the modern way for most companies, however, they must be stored and easily reproduced if needed to provide copies to the IRS.

While digital records are not subject to wear and tear like paper records are, they can be lost if proper arrangements are not made for safe storage. A failed hard drive or one that goes missing and not backed up can mean thousands of receipts are lost. An appropriate backup process should be developed. Storing the receipts locally and off-premises, are common approaches that many companies use. Many cloud services offer inexpensive storage and backup services for everything including business receipts.

Key Points

Business receipts reflect payment by a customer for services and materials. Copes should be retained to support warranty and corporate tax documentation requirements. Arrange for appropriate backup of electronic receipts and scanned paper receipts to avoid permanent loss of the receipts.

A proper receipt must include basic information such as date, goods and services provided, the amount paid, and the total remaining if a partial payment is made. A receipt can be handwritten, however, the majority are completed electronically and presented to the customer reflecting payment and how it was paid.

Issuing and retaining receipts are part of modern-day accounting systems. They are a requirement to support the business, the reporting of results, and assembling year-end tax results.

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