If your company policy doesn’t require giving receipts to customers, you may want to reconsider. Issuing receipts protects the customer, and more importantly, it protects you from the IRS and internal fraud.
A receipt gives the customer assurance that their money will be spent the way they intend it to be spent. It also gives them confirmation of purchase, so that if there are any issues down the line, such as title transfer or warranty execution, they have the necessary evidence.
If you are ready to start giving your customers receipts, the first thing you need is a template. There are a number of different types of receipts, but let’s start with a basic cash receipt, found here. As you can see, the cash receipt typically carries the same information as a personal check: company name, amount of cash, purpose, date, and official signature.
All of these give the customer assurance that their money will be handled appropriately.
Itemization for Tax Purposes
A typical receipt/invoice itemizes all the sales/purchases made. If your business ever faces an audit by the IRS, having that detailed information can be the difference between a quick audit and a lengthy investigation of business details. When you have record of consumer receipts, you can quickly assure the IRS that all transactions are above-board and included in tax statements.
Protection from Internal Fraud and/or Theft
As nice as it is to treat your customers well, the real reason you need to give customers receipts is to protect yourself.
A typical receipt ledger creates a copy for the customer, and a copy for the business. That way, the business can keep track of all sales, and can internally control that money is correctly deposited.
Let’s look at an example. A woman walks into a store that doesn’t offer receipts, and pays $10 for a new t-shirt. She gives the clerk cash, and then leaves. What’s to stop the checkout person from pocketing the money instead of putting it in the cash register?
By requiring that they give a receipt, you will receive a record of the transaction. That way, if the cash in the register doesn’t match the transaction records, you know that someone’s walked off with the cash.
Other Tips for Managing Receipts
For additional protection of your receipt books, keep track of them using a register. Here’s what you should do:
- In the register, record the date the book was received/purchased, the date it began to be used, and the date it was completed.
- ·Take a copy of the register, and store the copy at another location.
- Number each book when they arrive, so you can easily tell if any go missing.
- If possible, keep blank receipt books locked up or away from the office, to minimize the opportunity for theft and/or fraud.
Another way to protect your receipt policy is by getting your customers involved. Place a sign at the checkout counter (or online equivalent) offering cash-back or a freebie to customers when a clerk fails to offer them a receipt. If a clerk fails to follow company policy, then the customer has a strong incentive to tell the manager. This way, you can identify trouble spots and take appropriate action.
Remember, no one wants to play gotcha with the staff, but keeping track is essential for the health of the company.
In this day and age, receipts are not always physical, but electronic. Nonetheless, the principle remains the same. Whether you’re e-mailing a receipt or hand-delivering it, both the customer and the business receive the same benefits. Being able to track sales accurately protects the company from unwanted tax audits and fraud.
Image courtesy of Dan4th via Flickr