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To explain why sales receipts are great, you first have to start with the shortcomings of its big brother, the invoice.
Invoices are great, don’t get us wrong – and they’re totally necessary. They contain vital information that helps you to stay compliant with all the legal and business requirements of your home country and all the countries you do business in, you international business mogul you.
The problem with invoices is that they require so much of that vital information that it causes friction for yourself and your customers. Even if you already use an automation software to make them easier to create, invoices take a lot of mental effort on the part of your valued customers. They need to enter so much information about themselves to fulfil legal invoicing requirements that checkout forms become five minute tasks instead of a breezy thirty seconds.
They’re big, intimidating documents with a hell of a lot of information on them. You might look at one before sending it out, or look at the amount of information a customer has to enter to buy your product, and think “Wow, all this for a $10 e-book?” We hear you. So where do sales receipts come in?
Introducing sales receipts
Sales receipts are the cooler, hipper younger sibling to the staid, by-the-book invoice. Sales receipts are like invoices that learned text speak as a kid and, though they grew out of it, never lost that love for keeping things brief and omitting the unnecessary.
Be careful not to confuse a sales receipt with a payment receipt. The former is for accounting, containing information on the business and a few other choice pieces of information that make them legal tax documents. The latter is purely a proof of payment for the customer so that they can be sure they paid for an item, like you might receive after making a Stripe payment.
Also known as a simplified invoice (depending on where you’re based), a sales receipt carries the same clout as a full invoice and the same legal standing in terms of accounting regulations. You can get rid of some info, like your customer’s details or confusing exc. VAT figures and make for a cleaner, easier-to-read experience. With a sales receipt you get the same bang for far less buck, able to deliver a much more streamlined checkout process – one more in line with a smaller purchase.
How small of a purchase? Well – again dependent on your location – maximum value thresholds apply. This means that, for example, in the UK you can issue a sales receipt (a.k.a a simplified invoice) for any transaction below £250 in value (inc. VAT). In Ireland, you’re out of luck if the transaction is over €100. In Singapore you can stick to the sales receipt for anything below a whopping $1,000!
You might be thinking that this involves a bit of extra work on your part, deciding whether you need a simplified or full invoice. If you’re used to everything being smooth and automatic with Quaderno you obviously don’t want to ruin that flow by having to go in and select whether or not you want a full or simplified invoice for every transaction, do you? Of course not.
And of course, in true Quaderno style, we handle that boring accounting work so that you won’t have to.
Automated sales receipts with Quaderno
Setting it up could not be simpler, and means you won’t even have to worry whether something is sent as a sales receipt or a full invoice. Simply look up (or ask for) your tax authority’s guidelines on simplified invoicing, paying particular attention to the maximum threshold.
Armed with the threshold that applies to you, log in to your Quaderno account and head to Settings, and then Preferences on the bottom row. In pride of place, below the options for default language and default currency, you will see a field marked Receipt Threshold.
Simply enter your desired receipt threshold into that box, hit Save changes et voilà!
Quaderno will use that threshold to decide whether it should automatically generate a beautiful sales receipt or a just-as-beautiful invoice, and you won’t have to be any the wiser. Just like that you’ve made the switch to sales receipts – when applicable – and saved your customer, your accountant and yourself from a bunch of extra hassle.
How great is that!? If you’d like to get started with this right away then head to your Quaderno account – the update is live and available for you as you read this.
If you don’t already have an account, then you can grab a free trial at Quaderno and join us in kicking even more paperwork out of your business life, freeing you up for more of the good stuff and less of the stress. We’ll see you there.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.