Question

QuickBooks

How does a business know when to create an invoice and when to create a sales receipt? What are the key differences between an invoice and a sales receipt? What industries would likely use invoices over sales receipts and vice versa?

Answer 1

SALES INVOICE:

UNDER MERCANTILE SYSTEM WE RECOGNISED SALE EITHER CREDIT OR CASH.THEN THE SALE SERVICE RENDERED TO CLIENT ON CREDIT BASIS THEN WE ARE RAISING A CREDIT BILL i.e INVOICE. IT IS A BILL OR REQUEST FOR PAYMENT OF SALE. INVOICES RAISED MAINLY IN CASE OF CREDIT BASED SALES OR SERVICES.

SALES RECEIPT;

SALES RECEIPT IS CASH RECEIPT GIVEN TO THE CUSTOMER IN THE EVENT OF CASH SALES.SALE RECEIPT CONSIST PAYMENT MODE i.e CASH OR BANK....etc,IT IS USED IN CASH BASIS.

KEY DIFFERENCE:

SALES INVOICE IS RAISED IN CASE OF CREDIT SALES OR SERVICES WHERE AS SALES RECEIPT IS GIVEN IN CASH SALES OR SEVICES.

USERS:

SALES INVOICE: THE BUSINESS OFFERS CREDIT BASED TO THEIR CUSTOMERS THEN THEY ARE USING SALES INVOICE FOR EXAMPLE THE SERVICE SECTOR AND CONSTRUCTION SECTOR ALWAYS RAISED BILL ON THE COMPLETION OR PART COMPLETION WORK.

SALE RECEIPT: THE BUSINESS LIKE RETAIL INDUSTRIES, HOME NEEDS AND PROVISIONS STORES ...ETC THEY ARE GIVING IN CASH BASIS.