What is a Receipt of Payment?

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A receipt of payment is also called receipt or payment receipt. It’s a form of receipt that’s issued by the the seller to the buyer or issued by the buyer to the seller, verifying that a payment has been made as an exchange for receiving goods or services.

Also as a private individual (not a company), you’ll send a receipt of payment as proof for your own records. you’ll select whether or not you send the receipt before of when you received the payment. A corporation may also fire a receipt after you sell a product or service.

Photo by Sharon McCutcheon on Unsplash
Photo by Sharon McCutcheon on Unsplash

Even if the payment by the buyer is partial, a receipt of payment can still be issued. For transactions involving full payment by the customer, payment receipts function an indication that each halfies have with success done their part within the dealing. You can read more about this at the first page.

A general receipt of payment usually only include the basics in a transaction, but it depends on the case, it can be presented with a more detailed description of the goods and services received. One must realize that a receipt of payment is an important agreement in a business transaction since it can be used for the protection of both the seller and the buyer as well as it serves as an additional document used in the sales process.

What does a Payment Receipt include?

There are no general requirements on what items must be included on a payment receipt, but typically it will include the following:

  • The buyer and seller’s name
  • A label “receipt of payment”
  • A unique and original number
  • The date of the delivery of services or products
  • The date the payment was received
  • The amount received
  • A clear description of the products/services
  • A signature
  • A payment status (e.g. Paid)
  • Remaining amount due

In cases when a receipt also contains Taxes it should also be included on the receipt.

Photo by Helloquence on Unsplash
Photo by Helloquence on Unsplash

Benefit of making a Receipt of Payment

All types of receipts, payment receipts, cash receipts or even receipts in general, provide benefits to the selling as well as buying parties. You will read here several advantages of receipts that the buyer and seller can benefit from:

1. Contract or agreement of both parties

There are instances when a payment receipt can be used as a valid contract or agreement, which can be presented in the court of law when conditions with regard to the transaction are violated by any of the parties involved. Hence, when you are drafting a receipt, make sure that you are including and writing the correct and exact information for this is something that you can use as your defense or can be used against you.

2. Evidence in case of a reimbursement or warranty

A payment receipt can be used to request reimbursements and warranties especially when you spend for a company operation. Service warranties can be applicable if payment receipts are showed to the service provider. Furthermore, payment receipts will also allow a customer to return or exchange goods that might be defective as this is a proof of the previous transaction.

3. Proof in accounting records

Payment receipts will also prove that a reasonable amount was asked in exchange for the goods given or services performed. These will complete the accounting records and will simplify the process of tracking the finances of a business. Furthermore, when an internal auditor will perform an audit of the company’s financial statements, it is easier for the auditor to trace or vouch for the related receipts of the recorded transaction.

Additionally, for an external audit, the external auditor might request from the management or key personnel of additional documents such as receipts as a support of the accounting records. A payment of receipt, just like any other sales document, is a valid paper that can serve as proof for the transaction.

Photo by rupixen.com on Unsplash
Photo by rupixen.com on Unsplash

Tips for Writing Payment Receipts

Creating a payment receipt for the first time can be an intimidating and at the same time a challenging experience. We like that you choose for ReceiptofPayment.com to make life easier. When you have questions regarding making receipt you can ask us. While many people find receipts a hassle, you must bear in mind that general receipts are important because, as explained above, they can be used as an evidence for reimbursements or warranties, an advantage for the buyer; they serve as a contract or agreement of both parties, in which both parties can benefit; and lastly, they can be used to support the accounting records, which is a benefit of the seller.

When you know these things about receipts, you can write and issue receipts of payments that are complete and you have no unpleasant surprises afterwards. Don’t worry because it only takes a minute of your precious time to write payment receipts, and the tips for writing payment receipts presented on ReceiptofPayment.com not be detailed as that of a sales receipt.

A good and professional receipt should be in everyone’s administration

In sum, receipts are important when you are dealing with buying and selling and payments. Although there are receipts with more elements that are complex and more specific, there are several important elements to be included in a receipt of payment.

Other than being a proof or evidence of the payment from the buyer, receipts of payment also serve as an evidence for an agreement of both parties, and a supporting document of accounting records that is needed especially during an audit, whether it is an internal or external audit.

Lastly, don’t miss to check out our receipt maker and templates of payment receipts provided.

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