# What Is a Receipt?

![Receipt: Proof of a financial transaction or purchase.](https://www.investopedia.com/thmb/pXMCKu0Ee0ZzWxRVX-BDAYTWvK8=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/receipt.asp-FINAL-1-733f38a7ab49492785754d1a130b059b.png)

*— Investopedia / Joules Garcia*

> **Definition**
>
> Receipts provide documented proof of payment and can be required by businesses and tax authorities for various reasons.

## What Is a Receipt?

A receipt is a written acknowledgment that something of value has been transferred from one party to another. Receipts are issued to consumers from vendors and service providers, used in business-to-business transactions, and provided with banking or financial market trades.

### Key Takeaways

*   Receipts are an official record that represents proof of a financial transaction or purchase.
*   Receipts are issued in business-to-business dealings as well as stock market transactions.
*   Receipts are necessary for tax filing purposes.
*   Receipts can refer to the total cash inflows over a specific period in accounting.

## Tracking Transactions

Companies and other entities use receipts to track their cash flows, reimburse eligible payments, or claim certain benefits on their taxes. Each receipt should include the date of the transaction. They include other details in most cases as well such as the nature of the transaction, details of the vendor, method of payment, and any additional taxes or costs. They may sometimes require a signature.  

Many retailers insist that a customer show a receipt to exchange or return items while others demand that a receipt that was generally issued within a certain timeframe be produced for product [warranty](https://www.investopedia.com/terms/w/warranty.asp) purposes.

## IRS Requirements

The [Internal Revenue Service](https://www.investopedia.com/terms/i/irs.asp) requires documentation of certain expenses. Individuals should generally keep receipts and other records for at least three years after filing their tax returns but the IRS advises taxpayers to keep records for six or seven years for some types of expenses such as unreported income or bad debt deductions.

The IRS suggests that the following receipts be retained by individuals or businesses:

*   Gross receipts such as cash register tapes, deposit information, receipt books, invoices, and [Forms 1099-MISC](https://www.investopedia.com/terms/f/form1099-misc.asp)
*   Receipts from purchases and raw materials
*   Cash register tape receipts
*   Credit card receipts and statements
*   Invoices
*   Petty cash slips for small cash payments
*   Travel and transportation expenses
*   Asset purchases for real estate, furniture, or personal property

> **Important**
>
> The IRS has accepted scanned and digital receipts as valid records for tax purposes since 1997. Revenue Procedure 97-22 states that digital receipts must be accurate, easily stored, preserved, retrieved, and reproduced. The business owner must be able to supply a copy to the IRS.

## Origin of Receipts

The practice of [retaining receipts for tax purposes](https://www.investopedia.com/experts-share-top-tax-savings-tips-8417232) is thought to originate from ancient Egypt. Farmers and merchants sought ways to document transactions to avoid tax exploitation. Papyrus was used instead of paper. London banks used the printing presses of the Industrial Revolution in more modern times to print receipts with their brands.

## What Are Some Types of Receipts?

Common examples of receipts include packing slips, cash register tape, invoices, credit card statements, petty cash slips, and invoices. The format for these forms may vary but they all serve the same purpose of documenting the time and value of a business transaction.

## Is an Invoice the Same As a Receipt?

An invoice is a payment request. A receipt is a document for payment that has already occurred. Businesses frequently issue invoices after providing a service to notify the customer of the expected payment.

## What Are Gross Receipts?

[Gross receipts](https://www.investopedia.com/terms/g/gross-receipts.asp) are the total amount of cash or property that a business receives without accounting for any other expenses or deductions. Accountants use a company's gross receipts as one factor to calculate the firm's net income and profitability.

## The Bottom Line

Receipts are one of the basic units of corporate accounting. Businesses and individuals use receipts as proof of payment, to claim deductions on their taxes, and to document expenditures on their income statements as well as to substantiate the existence of the assets on their balance sheets.

> **Article Sources**
>
> 1.  Internal Revenue Service. "[How Long Should I Keep Records?](https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records)"
>     
> 2.  Internal Revenue Service. "[What Kind of Records Should I Keep?](https://www.irs.gov/businesses/small-businesses-self-employed/what-kind-of-records-should-i-keep)"
>     
> 3.  American Numismatic Society. "[A Brief History of the Receipt](https://numismatics.org/pocketchange/receipts/)."