When you buy something, you’re usually given a receipt documenting that purchase. These receipts—which might be printed on paper or sent digitally via email or an app—record the key details of the transaction, including what you purchased, how you paid, and the amount of money you spent.
As a consumer, you probably don’t think too much about that receipt; in fact, you may just throw it right in the trash. But as a small business owner, throwing receipts away is not an option—because cash receipts play an important role in a variety of business functions, including accounting, planning, and tax purposes.
But what, exactly, are these types of receipts? And why are they important for your business?
What Are Cash Receipts?
A cash receipt is a record that proves your business made a cash sale. These financial statements can be physical or digital and feature a variety of details, including:
- What was purchased
- The cost of each item or service
- The payment method (for example, bank deposit, cash, debit or credit card, personal check or cashier check, store credit)
- The total amount of the transaction
Some receipts might also include other information—for example, the business name and address, contact information, the specific cash register or POS system used during a transaction, a unique number to identify the receipt, a check number, the name of the client or customer, and/or a customer signature.
When Do You Record a Receipt?
Businesses need to generate receipts whenever they receive cash (via physical or electronic means, such as cash, check, or payment card) from any source, including clients, customers, lenders, and investors. In other words, you need to create and record a cash receipt any time a transaction:
- Increases your cash account (i.e., your current assets reported on your balance sheet)
- Decreases your accounts receivable account (i.e., the amount of cash your business is owed)
Typically, both you and the payer should receive a copy of the sales receipt to document the transaction.
Busy doing a lot of tracking? Hourly can take time and attendance tracking off your hands—and use that data to update your payroll in real-time. What’s more, it connects your payroll directly to your workers’ comp plan, so premiums are always accurate.
What if I Haven't Been Paid Yet?
If you haven't been paid yet, you can hold off on a cash receipt. That's because cash receipts aren’t recorded when you make a sale; they’re recorded when you receive a cash payment. So, an unpaid invoice doesn’t generate a receipt until the invoice is paid—and only then would you create, send, and record the receipt.
Examples of Cash Receipts
So, what do receipts look like in action? Some examples of relevant receipts include:
1. A plumber is hired to snake the drains inside a customer’s home. After he finishes his work, he provides the customer with a bill, who hands him a check for the total amount. Because cash changed hands, the plumber provides the customer with a receipt, which is recorded in his company’s cash journal when he arrives back at his office.
2. A graphic designer is hired to create a new logo for a company. After completion, the designer invoices the company for the cost of work on a net-30 basis, recording the invoice as an accounts receivable. When the invoice is paid, the designer issues a cash receipt, credits her accounts receivable, and debits her cash account.
Here’s an example of a cash receipt you can customize for your business. Just click "Make a copy" to edit your own.

What Are the Benefits of Cash Receipts?
Generating and managing cash receipts is a good general accounting practice. But that’s not the only benefit! Some other benefits these statements provide for your business include:
- Improves bookkeeping accuracy: Receipts create a paper trail that helps you reconcile accounts and correct any accounting discrepancies.
- Proof of sales: Receipts verify that transactions have taken place—helping you settle potential disputes with customers, claim tax deductions, and provide evidence to the IRS in the case of an audit.
- Helps track and manage financials: Recording receipts can help you easily calculate the cash flow and total revenue of your business, helping you track income and expenses, create or modify your budget, and plan for the future.
- Better internal controls: Recording receipts helps businesses improve and maintain internal controls (internal procedures that support accurate financial reporting) by creating an immediate record of a cash payment.
How Do You Record Cash Receipts?
It’s not enough to stuff a bunch of receipts into a file cabinet and call it a day; cash transactions need to be recorded and stored in a dedicated cash receipts journal, which is a specific part of your general ledger. To record entries into your receipts journal:
1. Make a Cash Sale
A cash transaction must take place before you can record an entry into your cash receipts journal. After your business receives funds via bank deposit, cash, check, debit or credit card, or a customer uses store credit, generate a receipt that includes details about the transaction. Provide a copy of the receipt to the payer and keep a copy for your records.
2. Record the Receipt in Your Journal
Next, you’ll need to record your transaction in your journal. The information included in these journals can vary, but many journals include the following information:
- Transaction date
- Account credited (the customer’s account information)
- Reference (the internal reference number of the account that the entry belongs to)
- Explanation (what was sold/what the sale was for)
- Cash Dr. (how much cash you received—debit)
- Sales Discount Dr. (the total discount applied to the transaction, if any)
- Accounts Receivable Cr. (the total amount credited to a customer’s account—credit)
- Sales Cr. (the total amount received in a cash transaction)
- Other Accounts Cr. (the total amount of cash received from other sources, such as interest or rent)
Cash Receipts Journal Entry Example
As mentioned, journal entries can vary, but let’s take a look at what one might look like:

Most bookkeeping software handles cash journal entries for you. Similarly, many registers and POS systems automatically generate relevant journal entries—so, chances are, you won’t need to manage this manually.
3. Keep Your Receipts and Financial Statements
After documenting your receipts in your journal, ensure you’re safeguarding all sensitive material—including receipts, cash deposit receipts, and other information—in a locked file cabinet and/or digital storage. This helps you maintain internal controls and is important for quick referencing if discrepancies, disputes, and other issues occur.
Frequently Asked Questions About Receipts
Still have some questions about receipts? Let’s cover some frequently asked questions about these financial statements.
What Is Considered a Cash Receipt?
A cash receipt is a document (either physical or digital) that details a cash transaction.
What Are Different Types of Cash Receipts?
Different types of receipts are generated from cash sales, debit or credit card payments, payments via check or bank transfer, or store credit. Receipts should also be generated for funds received via lenders or investors.
What Are Cash Receipts vs. Cash Payments?
A cash payment occurs when a payer transfers funds to a payee—like a customer to your business. This increases your funds and revenue, and can reduce a payer’s accounts receivable balance. A receipt is a record of this transaction that proves the cash payment took place.
What Is Another Word for Cash Receipts?
Cash receipts are also sometimes called sales receipts—or simply receipts.
Manage Your Cash Flow by Recording Your Receipts
As an average consumer, receipts can be a pain. But as a small business owner, cash receipts provide valuable insights into your company’s cash flow and financial health. Tracking how much cash is coming into your business (and when) plays a critical role in making decisions for your business, like when to take on a big expense or take your business to the next level.
And now that you better understand receipts, you’re armed with the information you need to track them—and reap the benefits of those accurate financials in the process.
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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Hello Jane,
My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
Cheers,
John Doe
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Hi Jane,
Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
Cheers,
John Doe
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Hi Jane,
Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
Cheers,
John Doe
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Dear Jane,
Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
Cheers,
John Doe
5. Introducing a New Product
A happy client may want to expand their business with you.
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Hello Jane,
I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
Cheers,
John Doe
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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Hi Jane,
You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
Cheers,
John Doe
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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Hi Jane,
I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!
Cheers,
John Doe