Despite a national reputation as enthusiastic spenders and dedicated consumers, many Filipinos remain confused about some very basic shopping and retail terminologies.
In fact, it is likely that even business owners won’t be able to answer such questions as the following: “What is the difference between an official receipt and a sales invoice?” “When can a customer demand a sales invoice or an official receipt?”
A sales invoice, which is more popularly known as a “bill,” is simply an itemized list of goods or services sold for which payment is due. In a sale of goods, an invoice usually includes a description of the merchandise purchased along with the quantity, price, and charges for it, if any. At the bottom of the invoice, a polite request for payment is sometimes made along with a note to disregard the bill if payment has already been made.
An official receipt, on the other hand, is a written or printed acknowledgment of the receipt of money or of the delivery of goods for which payment has been made. It is the proof of payment for goods delivered or services rendered, in contrast to a sales invoice, which simply indicates that payment is due for those goods or services.
By law, all persons doing taxable business are mandated to issue duly registered receipts or invoices for each sale of merchandise or delivery of service. It therefore follows that customers may rightfully demand a receipt for every purchase that they make and for every service that they receive and pay for. Another type of receipt for purchases of goods or services is the cash register machine/point of sales (CRM/POS) receipt. This type of receipt is rapidly generated by cash register machines, such as those used in businesses with heavy customer traffic like department stores and grocery checkout counters.
From the standpoint of consumers, official receipts, sales invoices, and CRM/POS receipts are interchangeable. In fact, some invoices or bills—such as utility bills—serve as official receipts once they are paid and machine-validated.
The difference between a receipt and an invoice only becomes significant when business owners report their taxable sales to the Bureau of Internal Revenue (BIR). During the tax season, the BIR looks at official receipts first because they are presumed to reflect all monies received by the business establishment, thus showing its taxable sales.
However, if the BIR suspects that an establishment is hiding or falsifying its official receipts in an attempt to avoid paying correct taxes, then the BIR will look into the establishment’s sales invoices to check into its transactions. If the sales invoices also appear to be falsified, then the BIR will go directly to the establishment’s customers to find out how much business was actually transacted during the taxable season.
Considering all of the above, business owners are strongly reminded to always issue a receipt with each sale of goods or services. Failure to do so can lead to government-imposed sanctions that might ruin one’s business reputation and goodwill.
This article was originally published in the July 2008 issue of Entreprenuer Philippines.