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Level 1
posted May 22, 2024 1:52:10 PM

Purchases and Sales with Cash

As a resale business, I occasionally make purchases and sell items using cash with individuals who aren't businesses. I typically don't receive receipts for the purchases, and buyers typically don't want receipts. Are there some best practices for keeping track of these transactions? Am I putting myself at risk by not having receipts.

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1 Replies
Employee Tax Expert
May 22, 2024 2:12:12 PM

When faced with the process where physical receipts are an issue there are some various steps you can take with the cash transactions.

  • Maintain a detailed log.
  • Use digital tools and applications.
  • Keep material communication and contracts.
  • Photographs and screen shots.
  • Do not default into a record less system, lack of overall company records is a burden on you.

Just because a customer does not want a receipt of a sales transactions does not mean you cannot create one for the sales event.  You should also be mindful of cash transactions that would be included in the requirements for collecting W-9s and issuing 1099s.