Invoice or Receipt? Let’s clarify when to issue an invoice and when a receipt is more appropriate.
First, ask yourself: Did the customer pay me after I issued an invoice, or have I not issued an invoice to the customer yet?
Many businesses create an “Invoice” as a payment request document, so the customer knows how much they need to pay. After the customer receives the invoice, they make the payment.
In the scenario where the invoice has already been issued, and the customer makes the payment, you only need to issue a “Receipt” document.
Once the customer has an open invoice, and you issue a receipt, the system will prompt you to link the receipt to the open document. This is excellent for those who want a well-organized accounting process. When you link the receipt to the open document, all the details from the original document will be copied to the receipt, making things much easier for you.
In the case where no invoice has been issued yet, and the customer makes the payment before you issue any documents (or based on a non-invoice document, such as a transaction receipt), you can simply issue a “Receipt with Tax” document.
Yes, you got it right! A “Receipt with Tax” is, in fact, a combination of two documents into one – a startup!
What happens when the customer pays in installments?
Here’s where some powerful tools not only save you time but also money. For instance, when a customer pays you in 12 delayed checks, there’s usually no need to issue a separate receipt for each payment. If you did that, your income tax would calculate the income before you actually received the money in your account, and you would end up funding the document from your pocket by paying income tax and VAT on money you haven’t received yet.
To avoid this, iCount has come up with an innovative solution – “Automated Invoices Against Delayed Payments.” Here’s a full explanation of how it works:
[Include the detailed explanation of the automated invoices against delayed payments.]
