Sales Receipts: 4 Types and Why They’re Essential to Your Business

If you’re going to a clothing store to buy a shirt, you’ll receive a receipt. If you’re going grocery shopping, you’ll get another receipt. Anywhere you go and make purchases of goods or services, there’ll be sales receipts. 

Sales receipts are not only important for customers as proof of their payments but also crucial to businesses. They allow businesses to gain visibility into their performance. If your business generates hundreds of sales receipts per month, it’s a good indicator that you’re on track and having high profitability. Oppositely, if you only have dozens of sales receipts per month, it’s time for you to adjust your business strategies. 

In today’s article, we’ll explore different types of sales receipts and their benefits.

What is a sales receipt?

A sale receipt is a financial document that records a purchase of either goods or services between buyer and seller. Typically, there are two hard copies of receipts given to both parties involved in the transaction. A buyer who makes a sale will get one copy while a seller keeps a similar piece.

Receipts are issued only after the goods have been transferred or the services have been delivered, and the customer has paid in full. There are cases in which businesses might issue partial receipts for customers who pay on a recurring basis. For example, a spa business often allows its customers who buy package service to pay partially rather than at one time. In this case, each time a service is delivered, the customer will receive a receipt with the amount of payment and the remaining balance.

What information does a sales receipt include?

Sales receipts templates vary from company to company. Usually, you’re at liberty to design a document that works for your business. But there is essential information that every sales receipt needs to have, otherwise, it’s nothing more than scrap paper.

  • Business name and address
  • Transaction date and time
  • Transaction number
  • The name and/or UPC (Universal Product Code) of each product or service
  • The quantity of each product or service
  • The sale price for each product or service
  • The total price of the sale
  • The rate of sales tax and the amount of tax
  • The total price with tax included

4 types of sales receipts

Though you have the freedom to design your own sales receipt template, there is actually a receipt format for each industry that you should follow. Major differences in receipt systems exist depending on what you’re selling, whether they’re products or services, and between customer-facing sales and business-to-business sales. Here we’ll have a look at 4 types of sales receipts.

1. Cash register receipts

This receipt type is mainly used in customer-facing retail transactions. When a customer makes a purchase at the point of sale, the cashier will input data to a cash register and issue a receipt out of it. A cash register receipt lists all items purchased, prices, total paid, date and time of the transaction, and method of payment. 

Cash register receipts are useful because they can be long enough to list all the items purchased on one paper. Thanks to this, they’re used by many retail businesses with high-volume sales such as grocery stores, clothing stores, convenience stores, and even gas stations.

2. Handwritten receipts

Before the cash register was invented and used along with receipts, it was the era of handwritten receipts. Hand-written receipts are used to record the transaction of goods or services sold.  As you know, receipts always come in two copies and are given to both parties of the transaction. Handwritten receipts are no exception. 

To make a copy of the handwritten receipts, the seller will put a sheet of carbon paper between two pages and press hard as they write. That’s how businesses issue handwritten receipts and their copies. 

Today, some small and private businesses still use handwritten sales receipts to record a transaction. For example, a landlord might like handwritten carbon receipts to record a tenant’s rent payment. Or a maintenance man who visits your home to fix mechanical equipment may tear a carbon out of the book when a customer pays a deposit prior to work being done.

3. Invoices

These are very common to record business-to-business transactions. When a company places an order, a vendor business will make an invoice, print it, and send it out to them by the post office. But nowadays, invoices can be delivered online through mail or invoicing software. 

Similar to other types of receipts, invoices include information such as the number of goods or services sold, the amount you’re charging, and the contact information of your business and businesses you’re invoicing. 

4. Packing  slips 

As its name suggests, this receipt type is issued and delivered along with packages upon your order. It contains a list of items included in a package as well as the price and the company’s contact information. 

Packing slips are often used by online businesses. Typically, these businesses often send out two sales receipts: an electronic bill when the order is placed, and a packing slip when the order is shipped. This allows receivers to check whether the delivered items are matched with what has been listed on the packing slip or not. 

3 reasons businesses need to keep sales receipts

1. Bookkeeping

It’s crucial to keep sales receipts because bookkeepers will use them to calculate the income of your business. Without bookkeeping, you wouldn’t be aware of the cash flow and your financial position.

It’s frustrating to record every single receipt in the account book to calculate the income and make reports. Also, no matter how careful a bookkeeper is, sometimes they can still make errors. It’s time to shake up the bookkeeping process. Bookkeeping management software which turns your receipts into data, organizes and makes reports at any time and anywhere is an optimal solution. Isn’t it awesome? Want to check it out yourself? Try Shoeboxed now!

2. Tax preparation

Don’t forget to pay tax when you run a business. It’s a legal obligation. To process the taxes on time and precisely, first you have to calculate your business income. Sales receipts are one of the largest sources of income for businesses. That’s why you should keep them.

3. Inventory management

Receipts can help to leverage your inventory management. You can use receipt data to analyze which products are selling at which times, which are bestsellers and which are flop items. This helps with future forecasting and assessing product demand.

See also: 5 Best Receipt Tracker Apps For Businesses

The bottom line

Sales receipts are important financial documents. Though they are small notes, they have a great impact on many business activities. They allow businesses to gain visibility into their performance, do proper bookkeeping, and even manage inventory efficiently.

The 5 Best Practices of Ecommerce Inventory Management

Inventory management is a vital, but often overlooked, aspect of running a profitable ecommerce business. It can impact your customer relations, your sales, your fulfillment speed, and most importantly, your bottom line.

Inventory management is a vital, but often overlooked, aspect of running a profitable ecommerce business. It can impact your customer relations, your sales, your fulfillment speed, and most importantly, your bottom line.

The key goal of inventory management is to know how much stock you have, where it is, and where it’s going. Keeping up with this information isn’t the most exciting part of running a business, but inventory management mistakes can lead to unexpected stockouts, shipping errors, oversells, loss of customers, and even your store being suspended from marketplaces.

A strong inventory management strategy will allow you to run lean, scale your business, ship faster, and increase your sales.

What Does Good Inventory Management Look Like?

Implementing a killer inventory management strategy doesn’t have to be expensive or difficult. In fact, it’s surprisingly simple. There are five general tips I give every ecommerce business owner I get a chance to talk to.

Use Uniform SKUs and Master SKUs

If you’re selling multichannel, inventory management will be a lot more difficult if you aren’t using uniform SKUs. The stock keeping number you use for a product should be as similar as possible no matter how many channels you’re selling that product on. This helps clear up any confusion as to your overall stock count of the product, which cuts down on overselling and stockouts.

Record Purchase Order Data

Do you know how long on average it takes for your purchase orders to be fulfilled? If not, you need to get your hands on this data. Mistimed purchase orders can lead to stockouts and more expensive purchase orders as you try and correct mistakes. Every moment your stock is listed as unavailable, you’re throwing money down the drain. This information will also help you run a leaner business. If you know exactly how long a purchase order will take compared to your average sales, you can make smaller purchase orders and save more money.

Choose a Great Software Solution

Some businesses choose to do their inventory management manually with Excel spreadsheets. I don’t find this a great strategy for any business that wants to grow. It simply isn’t scalable. It might work at 50 or even 100 orders a month, but what about 10,000 sales and hundreds of SKUs? You’d have to spend all day in front of a computer screen. Giving inventory management software a try has tons of benefits over manual inventory management.

  • No human error
  • Cross-channel inventory syncing
  • Automated order routing
  • Low inventory alerts

Picking a great software solution is a key aspect to taking the cap off your business and allowing it to grow while keeping your inventory management airtight.

Know the Seasonality of Your Products

If you sell youth football helmets online, you should know that the beginning of the peewee football season is going to be your highest selling time of the year. This allows you to make sure you’ve got extra stock ready to go. It also means you can run leaner during the offseason. Product seasonality is a major aspect of inventory management. Your stock isn’t a rotisserie oven: you can’t set it and forget it. It should adjust throughout the year. Pulling ecommerce reports on a yearly basis will help you know where your spikes are and be prepared for them, or you can use Google Trends to see when people search for the item most.

Keep Backup Stock for Emergencies

If the worst happens and you end up without any stock to fulfill your orders, it’s a good idea to keep some extra product on hand to fulfill the order yourself. This can come in the form of a backup supplier, a dropshipper, or even keeping a few orders’ worth of items in your own home or storage facility. Remember: this should just be used as a worst-case scenario. Fulfilling your own orders is costly and not scalable. But maintaining the ability to do so if necessary is smart business planning.

Conclusion

This may seem like a lot to do, but the benefits are immediately apparent. Like any good habit, it takes some dedication to start, but once you do, you’ll wonder how you ever managed without it. Start implementing these tips today and you’ll be surprised how much easier and more profitable your business can become.

About the Author

dion beary from ecomdashDion Beary writes about ecommerce for ecomdash, an ecommerce automation software system. He has more pairs of Chuck Taylors than any one person needs.

 

 

10 QuickBooks Tips for Product-Based Businesses

Accounting and inventory management are essential components to all businesses, big and small. Here are our top 10 QuickBooks best practices based on a variety of customer service issues we’ve helped alleviate along the way.

This post is brought to you by Lettuce, a simple inventory management tool made for e-commerce and wholesale.

Accounting and inventory management are essential components to all businesses, big and small. Unfortunately, small businesses have it tough considering that most enterprise software is just that: enterprise software.

We’ve been looking out for small product-based businesses for awhile now, helping our customers navigate the treacherous waters of the wholesale and eCommerce world. Here are our top 10 QuickBooks tips and best practices based on a variety of customer service issues we’ve helped alleviate along the way:

Create SKU’s for All Products and Product Variants

1. Create SKU’s for All Products and Product Variants

As your business grows, so will your customers. When you start working with bigger buyers, you’ll discover that they all require unique SKU numbers for every product you sell them. And yes, that includes variations. For example, a dress available in three different sizes should have three different SKU numbers (e.g. DRE-BL-S, DRE-BL-M, DRE-BL-L).

Not only are SKU’s important for your business relationships in the long term, but they’re extremely important to you in the back end. Organizing your inventory with SKU’s for products and its variants gives you the opportunity to have a true inventory count of your entire stock.

Accurately Track Your Inventory

2. Accurately Track Your Inventory

Keep a proper, accurate tally of your inventory. We mentioned that establishing unique SKUs can provide you with a true inventory count – you can see exactly what you’ve got in the warehouse with a quick glance.

In addition to this, regular inventory audits are a must. Go through and physically count all of your products once per quarter. Never find yourself understocked and unable to fill an order.

Use Sales Orders for Faster Order Processing3. Use Sales Orders for Faster Order Processing

Time and time again we come across businesses that jump straight from receiving an order to filling out an invoice. What this does is it deducts the required inventory from your books before you’ve physically moved the product leading to confusion and miscalculations later on in the ordering process.

Instead, before creating an invoice, you should create a sales order. It won’t deduct inventory from your books, eliminating the possibility of inventory discrepancies.

A sales order will just let you know that you need to fulfill a certain amount of inventory. Once you’ve made sure you have the stock and are ready to fulfill the order, you can create an invoice. After that, all that’s left to do is ship the order.

Do Not Create Separate Items for Wholesale & Retail4. Do Not Create Separate Items for Wholesale & Retail

Having a single item listed twice (one for wholesale and another for retail) creates two completely different inventory stacks. We know what you’re thinking – that’s what you meant to do! But frankly, it isn’t in your best interest, especially when it comes to quickly and efficiently keeping track of your inventory.

The best thing to do in this scenario is to have one item listing with multiple wholesale and retail price levels. Then specify if those items are taxable or nontaxable at the order level.

Create Different Price Levels to Ease Inventory Management5. Create Different Price Levels to Ease Inventory Management

Create and implement multiple price levels if you sell across different sales channels or to a variety of customer types.

For example, if you sell directly to consumers at retail pricing, and you also sell to brick-and-mortar shops at wholesale rates, you’ll want different price levels for each. Similarly, if you’ve got a single-site retail store that buys from you as well as a multi-site retailer to whom you’re offering better pricing, you will also want to establish different price levels.

It’s in your best interest to not create multiple SKUs with different prices. You’ll only make inventory management more complicated for your business.

Use Classes to Organize your Transactions6. Use Classes to Organize your Transactions

QuickBooks comes equipped with two simple categorizations to help you identify similar data – classes and types.

Classes are used to distinguish different kinds of transactions, whereas types are assigned to individual jobs, customers and vendors. You’ll want to use classes to organize transactions related to different places, departments or types of business. It will make it much easier to sort through your books later on.

Create Purchase Orders to Safeguard Business Deals7. Create Purchase Orders to Safeguard Business Deals

Purchase orders allow you to keep track of all of your orders with a specific vendor. We recommend always creating a purchase order (better known as a PO) each time you place an order with a supplier or a vendor. You should also create an additional document outlining your terms and conditions, as well as any other requirements (i.e. guidelines for defects).

The more information you provide on a PO, the safer you are from getting caught in a sticky situation with your vendor should anything go wrong. Your POs are essentially the prenups to your vendor and supplier relationships.

Remember to always include a start and end ship date and to state that you have the right to cancel the order if not delivered within the specified time frame.

Utilize Bills for Inventory Tracking & Terms8. Utilize Bills for Inventory Tracking & Terms

After you receive inventory from your supplier or vendor, you should account for it in your system.

The best way to do that is to create a bill that adjusts your inventory for you (unless if you have Enhanced Inventory Receiving turned on).

A bill also allows you to keep track of what you owe your vendors and suppliers. You can reference your bills to see which of your terms are up and then you’re ready to pay, send a payment to your vendor by creatinga payment entry in your system. Utilizing this process will ensure your books stay up to date and enable you to keep track of your terms and payment due dates.

Differentiate your Customers9. Differentiate your Customers

Too often, we encounter small business who don’t input different names for all of their customers, they’re simply labeled “customer.” This is a terrible practice because it completely handicaps you from being able to drill down into your customers to figure out who’s actually moving the needle for your business.

The ability to run detailed and granular reports only becomes more important as your business and sales grow.  Differentiating all of your customers and categorizing their orders appropriately is the way to go.

Utilize Payments10. Utilize Payments

Create a payment entry in your system whenever you send or receive a payment and apply it to the appropriate invoice or bill. Accounting is all about balance, so when using QuickBooks it’s key to maintain an equilibrium within the system by “accounting” for everything that happens from a transactional standpoint. Once you apply a payment to an invoice or bill, you can close them and complete that transaction.

The Bottom Line

Our QuickBooks recommendations come from the most common customer service issues we run into with our new customers. QuickBooks offers a wide range of features, so as a small businesses it’s hard to fully get a grasp of every functionality and how it’s actually beneficial to your business now and down the road.

Still, the best way to enhance and simplify the order process involves more than QuickBooks best practices. Order and inventory management apps like Lettuce make it unbelievably simple to manage your orders and save time processing them. You can easily sync with QuickBooks and conduct all of your important business functions in one simple, beautiful online application.

Nima Patel is a Growth Marketer at Lettuce, a simple inventory management tool made for e-commerce and wholesale. Her team writes about e-commerce, inventory management, and small business on the Lettuce blog. Say “hi” @nimapt.

P.S. Don’t forget to check out the integration between Shoeboxed and QuickBooks for an easy and painless way to enter your receipts into QuickBooks!