How to Create a Sales Receipt for Initial Deposit? Invoice?
I just got into a contract with a organization, and I had them give me an initial deposit of 30% of the final price for services charged. They requested for a receipt. How would I go about creating that receipt? Do I just write a couple sentences stating this is a receipt for the deposit ($600) they made with my company name and date deposit was made, then signed by me on the bottom? I'll be sending them an invoice for the full amount when the project finishes but they need a receipt for the deposit which is understandable. Should invoice be count as a receipt but I'm going to send an invoice after project finishes?
Do you guys often send the invoice after project completes or at the beginning? I read around and people seem to send an invoice early in the process to give customer time to pay or an invoice for each step completed in the process...
I decided to modify a receipt template. This pretty much have the following:
- Reference No.
- Amount Received
- Method: cash, check, or money order
- For what reason ?
- Received by: crypticdesign
That is what we do, and it is a much cleaner solution. In the event you chose to refund the client, you just create a credit note on the invoice and send it to them together with their money.
If the information above is everything you planned to put on the receipt I am not certain it would be valid, though I am not familiar with US accounting law, so please check this up with an accountant.
There is strict laws regarding what an invoice/receipt should contain of information for it to be valid. So make certain you get this right, else you might get IRS after you.
CrypticDesigns, receipts and invoices are really the same thing. They contain the same details, and can be formatted in the same way. The only difference is that you issue a receipt after you receive payment, and you (generally) issue an invoice before.
In your scenario, I would issue an invoice for the initial 30% deposit. Make it clear from the wording that it only covers that initial amount. If the client has already paid the 30%, add something like "Received with thanks". Then, when you've finished the project, issue another invoice for the remaining 70%. In that case, you might want to add some text like "Payment due 30 days" (or whatever other term you've agreed with the client).
The point is that the two documents should be completely separate. Don't make the mistake of invoicing (at the end of the project) for 100% of the amount, and stating something like "xxx already paid". From the accounting point of view, the amount that has already been paid is a separate transaction, not part of the final bill.
One final piece of advice: If you're in doubt about what details to include in the invoice, you can always ask the client. After all, if they have any particular requirements, it's in their interest to let you know.