A receipt of payment or payment receipt is a core part of doing business, whether small or large. Once the customer completes the payment, it’s your responsibility to generate a receipt and hand it to the customer.
This receipt isn’t just for keeping your transaction records but is also useful for many other things, including surviving tax seasons. Be it a receipt for payment or expense receipt, you need them all as long as you want to run your business and fulfill your tax obligations.
That’s why storing receipts in a specific ledger or saving them digitally in software makes sense. You may not know, but they are important for improving business cash flow and reducing unnecessary spending.
If you have recently launched a new business, it’s common to encounter questions like: “What does a receipt look like?” or “How do I make a receipt of payment?” Here, we will answer them all by providing business-friendly tips. So, let’s get underway.
What Is a Receipt of Payment?
A receipt of payment is a formal document to confirm that the customer has paid the amount and there are no pending dues. Every business needs to issue a receipt of payment once the customer has made the payment successfully.
Once issued, the receipt of payment goes directly into your transaction records, regardless of whether the payment was made in cash or online. You can either create a paper-based or digital receipt as soon as the money is received.
Why Is a Receipt of Payment Important?
Since you know the receipt of payment meaning, let’s find out why you should generate it every time you get paid.
Business Receipts of Payment
Creating receipts for businesses serves as more than just proof of payment. They offer better insights into your net earnings and also help you make a strategic financial plan for next year. Moreover, handing over receipts to customers is a professional way of doing business that can lead to increased business creditability. With payment receipts, you can create sales reports to analyze the top-selling items and eventually streamline your inventory process.
Customer Receipt of Payment
Making receipts for customers can aid in satisfying customers and doing positive word-of-mouth marketing about your business. From rendering services timely to accepting payments with receipts, you can show them how much you care for them. Apart from customer satisfaction, receipts also come in handy in dealing with customer disputes. You can get rid of false claims by showing a copy of the receipt you shared with clients after receiving the payment.
Delight Your Buyers with Accurate Receipts
Don’t let your buyers wait for long. Create and send accurate receipts digitally with Moon Invoice and leave a lasting impression.
How to Create a Receipt of Payment – 3 Effective Ways
There are 3 effective ways to create a receipt as soon as you get paid. Let us take a look at them:
1. Create Hand-Written Receipts
Small businesses that often generate only a few receipts in a day or week can go with the conventional way of making handmade receipts. You can maintain a receipt book where you only need to fill in blank pages using pen and paper. Once created, you can share the original copy with clients and keep a carbon copy for transaction records. However, making receipts using paper isn’t ideal because it is highly prone to errors.
2. Download Receipt Templates
Nowadays downloading readymade templates is the modern way of generating receipts. You can simply get readymade templates from any invoicing software and enter the necessary details. Many software like Moon Invoice also provide free receipt templates tailored perfectly for small businesses. You can download them at no cost and customize them straightaway in just a few clicks. Readymade receipt templates are available in different formats such as MS Excel, MS Word, PDF, or Google Docs.
3. Get Online Receipt Maker
If your business needs to generate receipts consisting of the same thing repeatedly, then you should adopt an online receipt maker tool. Using such tools, you can have peace of mind creating accurate receipts even if you are in a hurry. Plus, no need to enter the same thing frequently because once you have added the customer’s details, they will be stored in the cloud. This means it will help you generate receipts quickly in the future.
What to Include in a Receipt of Payment?
Whether you create paperless receipts or manually, below are things to be included in the receipt.
- Receipt Number: It is a unique identifier for tracking completed transactions, helping you easily make sales reports.
- Business Details: Enter your business details such as the company’s name, address, email, and phone number while generating a receipt.
- Paid Amount: Specify how much the customer paid regardless of whether they gave you in-hand cash or transferred money online.
- Payment Date: Enter the date on which the money was paid to you. You need to mention the date to analyze monthly sales and incoming cash flows.
- Product’s Quantity & Rate: Include the quantity of products or goods purchased from your store along with the rate. You can even add a brief description.
- Applied Taxes: Add taxes such as VAT or GST collected from customers to ensure compliance with tax regulations and fulfill your tax obligations.
Difference Between Receipt of Payment and Invoice
At first glance, a receipt and an invoice may look similar, but they both are different. Let us check out what sets payment receipts and invoices apart.
| Receipt of Payment | Invoice |
|---|---|
| A payment receipt confirms that payment has been made successfully. | An invoice is used to demand payment for delivered goods. |
| Receipt of payment is created after receiving the payment. | Invoices are generated and issued before or during the delivery of products. |
| It serves as proof of a successful transaction. | An invoice is considered a payment request and a legal record. |
| It is used to analyze business cash flows. | It is mainly used for tracking account receivables. |
| It represents a payment obligation that has been fulfilled. | An invoice indicates that the payee’s obligations are yet to be fulfilled. |
| A receipt only confirms whether the tax amount has been paid. | Invoices comprise tax details like VAT or GST taxes if applicable. |
How Can You Provide Proof of Payment?
With Moon Invoice, you can provide proof of payment instantly without doing lengthy paperwork or manual calculations. The online receipt generation software, Moon Invoice, offers ready-to-use receipt templates in any format to make professional receipts quickly. You only need to enter the required details and choose the templates that align with your business requirements.
Generating receipts online not only works as payment proof but also aids you in creating sales reports quickly as they will be stored in the cloud. You neither need to collect data from each receipt nor you need to calculate business profit manually.
Here’s how to generate proof of payment receipt using the online receipt maker, Moon Invoice:
- Log in to Moon Invoice or Sign up for free.
- Go to ‘Sales Receipts’ and tap on the “+” icon to add a new one.
- Fill in the important information such as business, payment, and customer details.
- Save changes and choose a template from PDF & print settings.
- Verify details and send it through WhatsApp or Email.
- Once sent, a receipt copy will be saved along with customer details.
Payment Receipt Example
Every business owner needs to issue a receipt whether they get paid in cash or receive money online. Since creating paper-based receipts is tedious and doesn’t promise accuracy, you can make digital receipts in under 2 minutes and impress your buyers. These digital receipts are also easy to access and you no longer need to carry them wherever you go.
In case you still wonder what exactly the receipt of payment looks like, below is the payment receipt example.
Create Payment Receipts Without Manual Calculations
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Conclusion
Receipt of payment, in a nutshell, lies at the heart of your business financial management. Keeping no track of receipts means you may find it difficult to enhance the cash flow and ultimately, it will affect your company’s bottom line. Nevertheless, you can utilize automation tools like Moon Invoice to transform the way you generate receipts and track them in real-time.
With the aforementioned steps, now you know how to make a receipt of payment in less time and simultaneously, keep track of them without any extra effort. Hence, it’s rightly said that the automated receipt generation process has an edge over the conventional method. Try creating a receipt online with Moon Invoice for free.
FAQs
Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.
