A receipt is proof of payment. It records that a specific amount was received on a specific date by a specific method, and it creates no obligation because the obligation it refers to has already been settled.
This makes it the mirror of an invoice. An invoice comes before payment and asserts a debt; a receipt comes after and asserts settlement. They describe the same transaction from opposite sides of the moment the money moved.
A complete receipt carries your business details, a unique receipt number, the date payment was received, what it was for, the amount, and the payment method. Two fields are commonly omitted and commonly missed: a reference to the invoice being settled, which makes reconciliation trivial, and the remaining balance where the payment was partial.
Why It Matters
Your customer needs a receipt to claim an expense, support a warranty claim, or close a purchase order in their own system. Meanwhile the receipts *you* hold are the evidence behind your own deductions — which is why retention rules apply to them exactly as they apply to invoices, and why a shoebox of fading thermal paper is a genuine audit risk rather than a joke.
Example
A £1,000 invoice is settled by a £950 payment with £50 withheld pending a fix. Stamping the £1,000 invoice "paid" would misstate what happened. A receipt for £950 on the date received, referencing the invoice and noting a £50 balance, records it accurately.
Frequently Asked Questions
Can I just mark an invoice as paid instead?
It is common and usually accepted between businesses. It falls short when the payment did not match the invoice total — a partial payment, a discount taken, an amount withheld — because the invoice then states a figure that was never paid.
Does a receipt need its own number?
Give it one. Receipts and invoices document separate events and should run in separate sequences; sharing numbers makes reconciliation ambiguous and muddies an invoice sequence auditors expect to be clean.