What is a Receipt?
We take them for granted, crumple them up and toss them in the trash. A receipt is merely an official record of a payment transaction, so why should we give them a second thought? Well, for starters, the IRS may require you to produce a copy of an itemized receipt to verify that a particular expense is indeed deductible. And most employers will usually require a copy of an itemized receipt for reimbursable, business-related expenses.
According to the IRS, a general rule of thumb is that you should keep purchase receipts, related to deductibles, for at least three years. The good news is that you don’t have to produce the receipts or copies of them unless you get audited. Most accountants will tell you to save your receipts for seven years to be safe, but the IRS, in extreme cases, can audit your back taxes for up to 10 years after they are filed. Once 10 years have passed, the IRS must cease their collection efforts. The good news is that only one in 250 tax filers will ever face an audit in their lifetime. The bad news is that you could be the one who gets flagged for review.
What is an Itemized Receipt?
According to QuickBooks, Payline’s accounting software partner, an itemized receipt usually contains the following items:
- The name of the merchant or service provider
- The merchant or service providers address, phone number, or URL
- (at least one point of contact)
- UPC or description of the item(s) or service(s) purchased
- Price for each item or service
- Rate of tax for taxable items and the amount of tax
- Grand total
- Date of purchase, and often the time of day
- Method of payment (cash, credit, or debit)
QuickBooks® products are designed for small and medium-sized businesses and offer a point of purchase accounting applications, as well as cloud-based versions that accept business payments online.
Use Payment Receipts to Build Business:
You may be surprised to learn that a receipt is more than just a simple piece of paper that can keep you out of trouble with the IRS or your boss. Receipts can also protect your business from fraud by clearly stating return policies and by compiling information about individual transactions. By knowing who sold what to whom and when disputes can be resolved quickly. They can also instill confidence in your retail or service location by listing various forms of contact information so your customers can reach out if they have questions or concerns. Remaining elusive may work with dating but it doesn’t work in the business world.
Businesses can speed up transactions by offering paper receipts. If your customer chooses the “print receipt “option then there is no need to enter a customer’s contact information manually. Text receipts require a phone number and email receipts need an email address. Removing the extra step can keep lines moving and customers happy. There is a lot of competition out there and sometimes it’s the small details that will create a loyal customer. Receipts can also be a powerful marketing and communications tool if used in the right way.
Encourage return business, or bounce-backs, by printing information on related products and by offering discounts on future visits. Printing coupons to hand out at the point of purchase can be expensive and cumbersome, and direct mailings can be pricey and subject to seasonal postal delays. Payline software makes it easy and cost-effective to customize receipts for a single store or multiple locations.
Choices can Improve the Customer Experience:
The Covid-19 virus has reshaped the consumer landscape in a myriad of ways. By giving your customer the option for touchless transactions, you’re allowing them to choose a payment method that feels safe and appropriate for them. Payline software can text, email, or print receipts. Offering discounts isn’t the only way to build customer loyalty. Use payment receipts to promote a sense of community during a crisis by offering helpful, up-to-the-minute information.
Some Overlooked Benefits of Paper Receipts:
According to the last US Census, 76% of American households have and regularly use a smartphone. More businesses are switching to digital Point Of Sale devices and some have even stopped accepting cash altogether. By just offering paper receipts, your business can appeal to this often forgotten demographic. You wouldn’t turn away nearly a quarter of your potential customers, would you?
Having a smartphone doesn’t guarantee a smooth digital transaction. If you’ve ever tried to get a signal in a busy shopping mall or big box store, you know what that means. No comparison shopping, no email coupons, no proof of purchase, and no retrieving digital receipts when attempting to process a return. Having a paper receipt solves all of those problems.
Most email users receive an avalanche of promotional emails every day and many of those are filtered straight to the spam folder. The amount of junk mail that an average consumer receives in a day can make them hesitant to share their email address. Giving those customers the option of a paper receipt can take the angst out of shopping.
By clearly communicating payment terms there are no surprises for you or your customer. Nobody likes surprises, especially when it comes to cash flow. New and growing businesses are often operating on razor-thin margins and they need to minimize the number of receivables they have pending. With clear, agreed-upon payment terms, you can expect your payments on a certain day, making it easier to purchase for inventory and hire and train more staff.
Here’s a List of Ways to Reduce the Risk of Chargebacks & Disputes:
- Set and follow a protocol to ensure consistency.
- Spell out all payment terms.
- Get it in writing and get a signature.
- Deal with customer service issues as quickly as they arise.
- Learn to spot the warning signs of fraud. If it feels like a red flag, trust your instincts.
- Thoroughly train employees, including management.
- Keep good records. Data can only be analyzed when you can easily retrieve it.
- Fight back when it makes sense.
Running a business can be overwhelming, and being a business owner requires constant attention, regardless of whether your business is brick-and-mortar, online, or both. Payline provides the cost-effective products and services that you need to provide a seamless transaction with every customer. Call Payline to learn more.
Use Data to Grow Your Sales:
You offer your customer a variety of options to improve the quality of their transactions. So what’s in it for the business? With Payline Point-Of-Sale (POS) system software, your devices can do more than take payments and issue receipts. Our software allows your business to sync inventory data across all channels. Updates can prevent stock outages with automatic inventory updates every five minutes. These same updates can identify top-selling items, retail trends, and peak sale periods.
A Few Ways That Data Can Improve Customer Service:
- Narrowly define your true target audience.
- Identify your customers’ pain points. What are the roadblocks to purchase?
- Understand the full purchase journey.
- Personalize individual customers’ experience.
- Plan with greater accuracy.
- Create more effective sales strategies.
- Help develop high-demand products
- Increase customer loyalty by reducing errors and downtime.
Connect your accounts:
Connect Payline software to your bank accounts, credit cards, POS devices, and more, and we’ll import and categorize your expenses for you. You can easily customize rules to categorize your expenses and run reports to see how you spend every dollar.
Stay on top of expenses, anywhere:
You may bounce back and forth between locations or travel for business. Payline makes it easy to track and organize your business expenses on the go. Upload or email receipts to QuickBooks in seconds. Snap photos of receipts with the mobile app. Eliminate the tedious task of combing through paper receipts.
- Keep and organize your receipts.
- Make notes on receipts about their business purpose.
- Scan receipts and keep them for at least six years.
- Take a picture of receipts with your smartphone.
- Have your receipts emailed to you, if offered.
- Don’t rely on bank statements, credit card statements, or canceled checks.
- Avoid dealing with cash. Going to the bank with excessive amounts of cash can be dangerous.
- If you’re facing an IRS tax audit and you can’t find all of your receipts, you can provide evidence that you claimed valid business expense deductions during the audit process. You will be able to recreate a history of your business expenses for the period in question.
- Your purchase history can be recreated by scanning the credit card that you used to pull up the purchase. Some stores have systems that show proof of purchases attached to the card if you don’t have a receipt.
- You can still claim deductions on your taxes without receipts for most transactions. The only time that you need to produce paper receipts is if you’re being audited.