Who Should Issue Receipts?
Usually, the payee should issue a receipt but if the payee is unable to do one, the payer can prepare it and get the payee to sign it at the time the cash is handed over.
Handling/Filing the Receipt
In the bookkeeping records, the payee should keep copies of the receipts they have issued and file them in the banking folder, or attached to the paid sales invoices.
The payer should keep the receipts they are given in their bills or banking folder. There is nothing to stop a seller from one day coming back to the buyer and demanding payment if a receipt was never issued to prove that payment was already made.
This is especially true for tenants who pay cash to a landlord (even if you know and trust the landlord because people can forget things easily).
I was personally stung by this problem in my early 20's where I had to pay a month’s rent again because I had no proof that I had paid already and the landlord apparently could not remember my original payment. I refused to pay with cash after that! Lesson learned.
The receipt format should contain as much information about the payment as possible to make it a complete document that can hold up in a legal situation.
If you browse through our various free receipt forms you will learn what basic details need to be included.
Interesting Fact - Receipts are being used less and less as people move to bank cards and other forms of electronic payment. We just might become a cashless society one day due to the fact that cash gets lost and stolen, it’s not always convenient to carry around, it can be awkward making sure the right change is available etc.
In the meantime, make the most of these free receipt forms!