Acknowledgement Receipt Templates, Definition, Purpose, and Elements
Simple definition: An acknowledgment receipt is a written record used as proof that cash, product, or service has been properly received. This is usually prepared by the seller and is used by delivery people for assurance that the items have been received by the buyer or that cash payment has been turned over from the buyer.
Upon reading until the end, you will acquire essential information about the general meaning of acknowledgment receipts and if they are important to small businesses in the Philippines, according to the regulations of the Bureau of Internal Revenue (BIR). You will also be provided with acknowledgment receipt samples and details on how to use them so you will be on the go anytime.
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Going In-Depth: Is an acknowledgment receipt important to small businesses in the Philippines?
Pursuant to the BIR Tax Code, in order to claim tax credits, registered businesses in the Philippines are required to submit sales invoices and official receipts. Revenue Regulations No. 18-2012 classify these documents into two main categories:
- Principal receipts/ invoices. These are the documents proving the sale of products or services, which include Value Added Tax (VAT) or Non-VAT sales invoices and receipts. These are the records honored for tax credits.
- Supplementary receipts/ invoices. These are the written records of delivery and other transactions, which include, but are not limited to, cash payment acknowledgment receipts, delivery receipts, collection receipts, and other documents deemed needed by the company.
The supplementary receipts/ invoices, which include the acknowledgment receipts, however, cannot be used for official tax declaration, but are still subject to registration to BIR. Thus, before the acquisition of hard copies of the supplementary receipts, businesses still need to secure the Authority to Print (ATP) and can only have their documents printed by accredited printers.
To assist you with your sales invoicing needs, you can access our step-by-step guide here (What is a Sales Invoice | Download Templates | For Businesses in the Philippines). To answer your questions about official receipts, access this article (What is an Official Receipt | BIR Regulations | Definition, Purpose, and Elements).
However, with the amendments created by the TRAIN (Tax Reform for Acceleration and Inclusion) Law in 2017, there has been a mention of online invoicing.
BIR regulations: Acknowledgment Receipts or Official Receipt or Online Invoice?
In line with the digital transformation strategy of the Department of Information and Communication Technology, the TRAIN Law demands that by 2023, it is necessary for businesses in the Philippines to submit online invoices or e-invoices. If you are new to the concept, we have an in-depth explainer here (How to Create Invoices | Complete Guide for Businesses in the Philippines).
To know more about the effects of the TRAIN Law on small businesses in the Philippines, we got you covered here (TRAIN Law | Everything Small Businesses Should Know).
How does it Work: Acknowledgment Receipt vs Sales Invoice vs Official Receipt
Now that you know which documents are required, it’s now time to know the differences among these three documents. Let’s get to know them as we take a look at the processes involved in a sales transaction.
- Seller to Buyer transactions. All of these written documents are issued by the sellers to the buyers.
- Sales Invoice. A sales invoice is provided by the seller and states the amount to be paid by the buyer within a certain period of time. You can get more details in our explainer article here (What is a Sales Invoice | Download Templates | For Businesses in the Philippines).
- Acknowledgment Receipt. Upon the delivery of the product, an acknowledgment receipt is issued, and the buyer signs it as proof that he or she has received the items from the seller. Catch a detailed guide here (What is an Acknowledgement Receipt | Download Templates | Definition, Purpose, and Elements).
- Official Receipt. The buyer will then give the cash payment, as stated in the sales invoice, and the seller will issue an official receipt as proof that he or she has received the payment from the buyer. Know more about this document in our quick guide here (What is an Official Receipt | BIR Regulations | Definition, Purpose, and Elements).
After knowing the meaning of acknowledgment receipts, are you now ready to make your own? Check our free acknowledgment receipt samples below.
Acknowledgment Receipt Sample: How to Use
After downloading our free sample, you may be wondering which details you should include in your acknowledgment receipt of payment.
- Company Letterhead. This makes your document look more professional.
- Document title. Just put the words “Acknowledgement Receipt” in the center of your document.
- Number. The document number makes bookkeeping easier.
- Date Received. Clearly indicate the date the items are received.
- Received from. This is the space where the name of the buyer should be placed.
- Address of the buyer. Putting the full address would be helpful.
- The sum of. Applicable to cash transactions, it is necessary to indicate the amount here.
- In full/ partial payment of. Being specific with the kind of cash payment is necessary for bookkeeping. This is also the part where the name of the item received is placed.
- Mode of payment. Detailing whether it is a cash payment or check payment would also be important.
- Authorized signature. The document becomes official when the buyer affixes his or her signature here.
- Next step. Including further instructions, such as settling the remaining balance, delivering the second batch of orders, or non-compliance policies would also be helpful to the buyer.
- Seller contact information. Lastly, provide hospitality by including ways on how to contact you again.
Do you have specific information about your business that you need to include in your acknowledgment receipt? Worry no more because Kernel Tools is here to help.
Let’s make invoicing simpler: Use Kernel Tools
For expert assistance in all things related to invoicing, acknowledgment receipts, official receipts, and other accounting documents, Kernel Tools is your go-to friend. Create an account now and together, we will make invoicing a breeze. Here’s our registration guide (How to Create and Manage Invoices with Kernel Tools). )