What is a receipt?

A receipt is written confirmation that a payment has been made. Unlike an invoice, it creates no obligation — it closes one. The buyer keeps it to prove the expense, and you keep it to show the invoice was settled.

For cash payments the receipt is often the only record either party has, which is why it should name both parties, the amount, the date and what the payment was for.

When you must issue a receipt

Rules vary, but a receipt is generally expected whenever a customer pays in cash, whenever they ask for one, and whenever the payment is for something they will claim as a business expense.

• Cash payments of any size
• Deposits and part payments against a larger invoice
• Rent, tuition and other recurring personal payments
• Any payment a customer will claim back from an employer or the tax office

Receipt vs invoice

Issue the invoice when the work is done and payment is due. Issue the receipt when the money lands. If a customer pays immediately, the receipt on its own is enough. If they pay on terms, you will end up issuing both, and both should carry the same reference so they can be matched later.