How to Write Receipts and What Information to Include

A receipt serves as a written acknowledgement that a financial transaction has occurred, confirming that something of value, typically goods or services, has been transferred from one party to another in exchange for payment. Businesses issue receipts to customers as proof of purchase, documenting the details of the exchange. This documentation is important for both the buyer and the seller.

For buyers, receipts provide evidence for returns, warranty claims, or for personal budgeting and expense tracking. Businesses rely on receipts for accurate record-keeping, tracking sales, verifying income, and substantiating expenses for tax purposes. Receipts are a fundamental element in maintaining clear financial records and ensuring transparency in commercial dealings.

Key Information to Include

A comprehensive receipt should contain specific details for accounting, tax, and customer service. The seller’s full legal name, business address, and contact information, such as a phone number or email, should be displayed for clear identification. The date and time of the transaction are essential.

A receipt should include:

• A clear and specific description of goods or services, including quantity and unit price.
• The total amount paid, itemizing sales tax, discounts, or service charges.
• The method of payment (cash, credit card type, check number).
• The buyer’s name or company name (for business-to-business transactions or reimbursement).
• The Employer Identification Number (EIN), if applicable, for services or larger transactions.

Choosing a Receipt Creation Method

Businesses have several options for generating receipts, each suited to different operational needs. Handwritten receipts, utilizing pre-printed receipt books, are a method for small businesses or situations where electronic systems are unavailable. When using handwritten receipts, ensure legibility. A carbon copy system provides an immediate duplicate for the seller’s records.

Receipt templates, widely available online or at office supply stores, offer a structured format for creating professional-looking receipts. These templates can be customized using word processing or spreadsheet software to include specific business branding and details. Templates help ensure consistency in the information provided.

For higher transaction volumes, accounting software, point-of-sale (POS) systems, or dedicated receipt generator applications are beneficial. Modern POS systems automate sales, calculating totals and taxes, accepting various payment types, and generating detailed receipts instantly. Many digital tools integrate with inventory management and accounting software, streamlining record-keeping. These systems capture and organize transaction data, reducing manual entry errors.

Distributing and Storing Receipts

After a receipt is created, it must be issued to the customer and a copy retained for the business’s records. Receipts can be issued as physical paper copies, electronically via email, or through digital downloads from online portals. Providing digital options offers convenience for customers and reduces paper usage.

Proper storage of receipts is important for financial reconciliation, potential audits, and dispute resolution. Businesses should maintain an organized system for record-keeping, whether physical or digital. Digital storage, such as scanning physical receipts into cloud-based systems or using dedicated receipt management software, offers enhanced accessibility and reduces physical clutter. Digital copies are accepted by tax authorities if accurate, complete, and legible.

The Internal Revenue Service (IRS) advises businesses to retain receipts and other supporting documentation for a minimum of three years from the tax return filing date. This period can extend to six years for substantial understatement of income, or seven years for bad debt deductions or worthless securities. For asset records, retention should be for the period of ownership plus three years after disposal. Maintaining records for at least seven years is a general recommendation to cover most audit possibilities.