What is a Cash Receipt?
Definition: A cash receipt is a printed or written statement of an amount received from a customer during a cash sale transaction.
At one time or another, you must have received a receipt at a transaction or payment point. The receipt is commonly referred to as a cash receipt. The customer takes the original copy, and another is left at the transaction point.
Even though the cash receipt is primarily for cash transactions, it may also be accountable for a credit (receivable) sale. It occurs when goods or services are sold on credit.
Take, for example, a supplier of vehicles or machinery. When you order them, they are delivered on credit terms, and the supplier will draw a sale receipt with terms of payment; say 30 days after delivery. The cash receipt will only be issued when the supplier receives all the amount payable for the goods and services supplied.
Cash Receipt Example
Based on the know-how that the receipt can be written or printed, there are vital details, which must reflect on it: –
- Date of transaction
- Name of the customer
- Amount received
- Method of payment (cash or check)
- A number identifying the document
- Signature of the person receiving the payment.
Different Types of Cash Receipts
An in-depth exploration of different means of generating official cash receipts
Big organizations would choose to have a mix of cash register iPayment receipts and manual cash receipts. Each of these has been used differently and could have different details. For example
Cash Register Receipts
- Do not collect the names of customers
- Are not submitted to FMO for follow up.
- Do have to be kept securely
iPayment Receipts
- The system assigns the receipt numbers
- Are not submitted for tracking processes
- Do not collect customer’s information
- Are not kept secure
Manual cash Receipts
- They have four copies; Yellow copy provided to TAMUG and blue copy for safekeeping. The pink copy is for the FMS, and the white copy is given to the customer
- Must be used numerically, and if any is missing, an immediate notification must be made to FMS. Suspicions of the cash receipt having been stolen but be reported to the authorities
- They are as good as cash. Hence they must be kept securely
- Must be appropriately itemized with an indication of the date of transaction, name of the customer, product or service purchased, and the unit price as well as quantity. Finally, it must reflect the total cost of all goods and services.
A quick look into the pros and cons of cash receipts
A majority of business people struggle with payment methods. Nonetheless, each method has its pros and cons, and it takes careful considerations to pick the most convenient.
Benefits of Cash Receipts
- They do not require any form of authorization, unlike when you are using credit or debit cards, which ask for PIN codes.
- They can work without electricity. Thus they are not subjected to technical problems.
- They do not leave personal records to say for example if you are transacting for medical services
- They provide appropriate and truthful reporting
- They are easy to control from freewheeling managers. The receipt hardly allow any room for overspending
Drawbacks of Cash Receipts
- They are most effective for short periods, say up to six months, and with shorter periods, companies take longer to create budgets. In the long run, there is very little time to attend to the usual and profitable activities.
- They are very vulnerable to theft or damage, and without a computerized record, it would be tough to identify cash. More often, cash sales have been a source of attraction for thieves, and besides, employees could also steal.
- They may turn to be a high cost of labor, especially if the amounts received are high. It will take more time to count and bank and more so an added service fee for banking.
- Chances of receiving fake money are high.