Cash Receipt: What Is It and How to Use It Properly?

Cash is still widely used in various business sectors, especially in small businesses and individual activities. However, to ensure financial transparency and comply with legal requirements, it is essential to properly record every cash payment.

This is where the cash receipt (PPK) plays an important role – an official document that proves the receipt of money.

Proper use of the PPK not only helps maintain orderly accounting but also reduces the risk of tax disputes or accounting errors. In this article, we will discuss when and how to use a cash receipt, what information it must include, and how to manage its accounting effectively.

A cash receipt (PPK) is a document confirming that a certain amount of money has been received from an individual or company. It includes the date, amount, payer, recipient, and signatures. This receipt is used for accounting and legal transaction purposes.

A cash receipt is important because it ensures transparency and proper financial accounting. It allows you to:

• Confirm the execution of cash transactions.
• Maintain clear accounting without a cash register.
• Reduce the risk of tax declaration errors.
• Ensure smooth preparation of financial reports.

The PPK is especially important for those engaged in individual activity or small partnership accounting.

A cash receipt is most commonly used when payments are made in cash, but there is no obligation or possibility to use a cash register. Such situations include:

• Individual activity – when services are provided under an individual activity certificate and payments are accepted in cash.
• Small partnerships (MB) – when an MB accepts cash from clients and these payments must be recorded in accounting.
• Transactions between companies – when there is no requirement to issue an invoice, but payment confirmation is necessary.
• Salary advances – when an employer pays part of the salary in cash, which is later reflected in payroll accounting.

Important! A cash receipt is not an invoice, so it cannot be used to reclaim VAT.

Each PPK must meet certain requirements. The document must include:

• Receipt number and date.
• Payer’s details (name, surname or company name, code).
• Recipient’s details (company name, code).
• Amount in numbers and words.
• Purpose of payment (what the payment was for).
• Signatures of the payer and recipient.

To avoid errors, it is recommended to use accounting systems that automate the filling of these documents.

How to properly register PPKs in accounting?

• Receipt archiving – all receipts must be stored in accounting records for no less than 5 years.
• Declaration – income received via PPK must be accounted for according to income declaration procedures.
• Electronic receipt management – if you use digital accounting, you can register receipts in specialized systems such as Rivile.

Common mistakes when issuing PPKs:

• Incomplete data (missing amount in words, signatures).
• Incorrect numbering (PPKs must be numbered sequentially).
• Receipt not saved in accounting.
• Discrepancy between declared income and actual transactions.

Automated accounting helps avoid errors.

• Use business management systems – they allow automated receipt registration and reduce the likelihood of human error.
• Establish clear internal controls – it is recommended to have rules for how receipts are filled out and registered.
• Comply with legal acts – the use of PPKs must comply with the Law on Accounting of the Republic of Lithuania.

A cash receipt is an important accounting document that helps record cash transactions. By filling it out and registering it properly, you can ensure transparent bookkeeping and avoid accounting errors.

When should a cash receipt be used?
A PPK is used when payment is made in cash, but there is no requirement to have a cash register.

Can a PPK replace an invoice?
No. A PPK is only a confirmation of money received and cannot be used for VAT deduction or in place of invoices.

How should PPKs be stored in accounting?
PPKs must be numbered and stored for no less than 5 years.

Can a PPK be issued electronically?
Yes, if you use an accounting system such as Rivile ERP, PPKs can be generated electronically.

How is a PPK related to income declaration?
All income received via PPK must be declared as taxable income.