When you visit a bank and deposit or withdraw funds, the bank will provide you with a bank receipt. A bank receipt includes all of the information relative to the financial transactions conducted during your visit to the bank.

This is how banks keep an accurate and up-to-date record of all financial transactions that are conducted at a given location and by various account holders. Bank receipts are also given to businesses that conduct financial transactions at a given bank or financial institution.

The financial term is used throughout many monetary transactions, so it is good to have a basic understanding of when and why bank receipts are used.

When and Why Bank Receipts Are Used

After any monetary transaction, a financial institution will provide customers with documentation of the details of the transaction in the form of a bank receipt. While not always used for transactions with deposit accounts, bank receipts are standard forms of documentation for most financial transactions. Customers who visit banks or other financial institutions should expect to receive a bank receipt for all transactions, even including loan and credit card transactions.

Typically, a hard copy is given to the account holder who conducted the transaction. Many financial institutions now offer a digital copy of receipts, such as by email or via text message, as well as an alternative. Banks similarly keep their own copy of a bank receipt for record-keeping of all financial transactions that occur with various account holders of the bank.

Aside from the purpose of keeping accurate financial records, banks and other financial institutions use bank receipts as a form of collateral. Should a dispute arise with a customer, the bank will have a detailed record of bank receipts to refer back to. Whether an employee that represents the bank makes an error during a transaction or an account holder miscalculates a portion of a transaction, bank receipts make it much easier to resolve disputes.

For example, if an account holder makes a bank deposit but an employee at the bank accidentally deposits the funds into the wrong bank account, this will be a huge issue. Once the account holder leaves the bank, unless they stop to check their balance in their bank account, they would not know of the depositing error until a later date. Bank receipts help to mitigate the issue by immediately providing the account holder with the transaction information. The account holder can then return to the bank to dispute the issue by using their copy of the bank receipt to prove that there was an error in the deposit transfer. The bank will also have its own copy of the bank receipt to confirm the transaction error and to determine where the problem arose to ensure that it does not occur again in the future.

Bank Receipt Details

Bank receipts will vary by bank or institution, but all bank receipts will include essential information. It is important to keep a record of more than just the transaction date and total.

To ensure that all of your bank receipts contain information needed for proper financial record-keeping, refer to this list of details that should be included in your bank receipts.

Details should include:

  • Bank account numbers
  • Account holder name(s)
  • Date of transaction
  • The total amount for the transaction

Sometimes, a bank receipt will even include detailed information on the employee number of the bank employee who assisted you with your financial transaction.

How to Use Your Bank Receipts for Bookkeeping

Given the benefits of bank receipts, it is advised to reconsider before tossing all of your receipts in the trash. While this might be a tempting habit to continue, consider placing your bank receipts in your pocket as you walk out the door of the bank instead.

Bank receipts can be a very helpful tool for your bookkeeping practices, for both personal and business expenses. In fact, many banks and other financial institutions recommend balancing your account books on a monthly basis and referring to your bank receipts throughout the process. It is a common practice to go over monthly bank statements and cross-reference this information with all of the bank receipts that have been collected for a given month.

If you go to a professional accountant to track your personal or business finances, it is very standard for your bookkeeper to request a copy of your bank receipts. Bookkeepers use this information to track your income, your expenses, and all other financial transactions that impact your cash flow. This financial data is used to keep an accurate and real-time record of your financial habits. Bookkeepers also use bank receipts for data entry purposes to track your credit card payments, which can help you stay on top of your payments. With good bookkeeping practices, bank receipts can even help you improve your credit score over time.

Some people prefer to use accounting mobile apps that automatically track this information in real time, as opposed to working directly with an individual accountant. For mobile apps, it is not necessary to keep a hard copy of your bank receipts, as this information is readily accessible directly online. Even so, it is sometimes recommended to keep both physical and digital copies of your bank receipts for your own records.

How to Use Bank Receipts for Your Taxes

The way that bank receipts are used for accounting purposes will vary by personal preferences. The purpose of keeping bank receipts will also differ depending on whether an individual is using them for personal or business financial purposes. In some cases, bank receipts are used for both.

Either way, this form of record-keeping is beneficial for personal and business tax purposes, as well. They can be used as a reference for those who claim tax deductions. For example, if you pay interest on your mortgage payments, you will need to keep a bank receipt listing the total amounts that were paid in order to claim the deduction.

The same applies to business tax deductions: To claim the deduction, a business will need to provide proof of purchase for the business expenses. The easiest way to do this is by submitting a copy of all bank receipts from a given year that the business was in operation.

Similar to bookkeeping practices, some individuals and business owners prefer to use digital platforms and online software for their financial records. QuickBooks, for example, is a popular accounting platform that enables account holders to keep track of their bank receipts and other financial records. Some digital tools are better than others, though. Skynova, for example, has integrated features that assist with tax preparation services. The best way to streamline your bookkeeping practices is with digital accounting software like Skynova or QuickBooks. These tools are a great way to save trees, as well — the less paper we use, the better!

Upgrade Your Accounting Methods

Once you start to keep a record of all of your bank receipts, it is essential to stay organized. Whether you keep physical hard copies or digital copies of your bank receipts, you'll need the right accounting software to stay organized.

Skynova's small business accounting software can help you easily track, manage, and reference your business expenses. Discover how Skynova's accounting software is the right solution for you and your financial needs. We also offer a variety of online invoicing tools for small businesses so you can spend less time in front of the computer and more time focusing on what matters most: your company and the people you serve.

Notice to the Reader

The content within this article is meant to be used as general guidelines and may not apply to your specific personal or business financial situation. Always consult with a professional accountant to ensure that you're meeting accounting and tax preparation standards.