Before we clarify the term, we would like to remind you general meaning of the word receipt. Receipt is a document that verifies financial transaction. Receipts are also necessary for tax purposes as proof of specific expenses. Receipts are issued in stock market transactions as well as business-to business dealing processes. If the recipient of the payment is legally required to collect Value Added Tax (VAT) or sales tax from the customer, the amount would be added to the receipt and the collection would be considered to have on behalf of the relevant tax authority. Retailers or service providers will issue a receipt to their customers to keep track of goods and services supplied and make it easier for the customer to return an item if needed.
Now, back to the main subject of interest, a receipt of purchase is made when one accepts materials from a specific supplier. A purchase receipt is a document that is given to consumers as a record of their sample purchase of goods and services, in other words it is a proof that purchase was made by a customer, what one bought and how much one paid. Purchase receipts are made when one accepts items from one’s supplier usually against a Purchase Order. Purchase receipts can either be written by hand or printed at a cash register.
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What does receipt of purchase should include in it?
The main constituents of the receipt of purchase are: 1. The name and address of the business/individual receiving the payment. 2. The name/address of the person making the payment. 3. The date the payment was made. 4. A number of the receipt. 5. The description of goods and services. 6. The amount paid.
In conclusion, when issuance of a Purchase receipt is a day-to-day component of one’s business activities, the business owner must make sure what are required details and how they should be presented.
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