Example
"Deposit received 4 September, $6,000. Balance of $9,000 due on completion."
Also called a payment receipt, proof of payment, or a paid invoice.
What it means in practice
An invoice asks for payment and a receipt confirms it. A receipt names what was paid for, the amount, the date, the method, and any balance still outstanding.
Issue one for every deposit and every cash payment without being asked. On a part payment it doubles as the reminder of what is left.
Where it shows up on the paperwork
What was paid for, the amount, the date, the method, the invoice it settles, and any balance still outstanding. A PAID stamp is convention rather than a requirement.
What goes wrong
- Only issuing receipts when asked, so cash payments go unrecorded on both sides.
- Issuing a receipt that says paid in full for a part payment.
- Leaving the invoice number off, which makes the receipt hard to match later.
Common questions
What is proof of payment?
A receipt is proof of payment: it says money arrived, how much, and when. An invoice is a request for money and proves nothing about whether it was paid.
Receipt vs invoice: what is the difference?
The invoice comes first and asks for the money. The receipt comes after and confirms it arrived. Same job, same amounts, opposite ends of the transaction, and many jobs need both.
When should you issue a receipt?
When the payment clears, not when it is promised. For cash, at the moment it changes hands, because cash leaves no other record and the receipt is the only proof either of you will have.
Do I have to give a receipt?
Rules vary by state and by how the payment was made, but it is good practice for every payment and near-essential for cash, where nothing else records that it happened.
Can a receipt show a balance?
Yes, and it should on a part payment: what was received, and what is still owed with a way to pay it.