What to do when a client has no receipt

Sooner or later a client says, "I don't have a receipt for that." You still have to close the books. This guide gives you a calm order of operations: try to recover the document, fall back to a written explanation, and record what you did so the file explains itself later.

General information, not tax advice. How much documentation is needed depends on the type and size of the expense and on the client's situation, so confirm the rules with the client's tax preparer.

Step 1: Try to recover the receipt

Before you give up on a document, check the places it usually hides:

• The client's email. Search the vendor name, the amount, and the words "receipt", "order" or "invoice". Online purchases almost always send one.
• The vendor's account. Many vendors let customers re-download invoices (software, utilities, fuel cards, online stores).
• The card or bank statement. A statement line shows the date, amount and merchant, which is often enough for simple purchases. It is not an itemized receipt, though.
• The vendor itself. A phone call or email asking for a duplicate receipt often works, especially for larger purchases.
• A photo. Someone may have photographed it, or the item or job it relates to.

Step 2: Ask for a short written explanation

When no receipt can be found, get the client to answer three questions in writing, by email reply is fine:

1. What was it for?
2. Was it a business expense, personal, or mixed?
3. Who was it for, if relevant (client, job, employee)?

Keep the answer with the transaction. A dated email in the file is a better record than a memory.

Step 3: Decide how to record it

• Small, routine expense with a clear explanation: record it normally with a note that no receipt exists.
• Larger or unusual expense: flag it for the client and, where relevant, their tax preparer. Ask whether they want to claim it.
• Cannot explain: record it to an uncategorized or owner's draw account and tell the client. Do not guess.

Your engagement terms should say which of these you do. The client receipt policy template includes a line for it.

What the IRS says about lost records

The IRS says taxpayers generally need documentary evidence such as receipts, canceled checks or bills to support expenses, with exceptions, and it addresses incomplete, reconstructed and destroyed records in Publication 463. Its recordkeeping pages also list the supporting documents to keep. If a client is in this situation for a significant amount, they should speak to a tax professional and not rely on a bookkeeper's judgment.

Prevent it next time

• Ask for receipts within a week of the purchase, not at month end.
• Give clients one easy place to send them: a dedicated email address or a text number.
• Agree a threshold below which no chase is needed.
• Use the templates so the request is short and specific.

Paperwork Butler handles the "no receipt exists" answer too: the client can reply with a one-line note, and you see it next to the transaction.

More guides

• How to Get Receipts From Clients (Without Nagging Every Month)
• Missing Receipt Request Email Template for Bookkeepers
• How Long to Keep Business Receipts and Records (IRS Guidance)
• How to Chase Receipts by Text Message (Without Being Annoying)
• Month-End Close Checklist for Bookkeepers (With the Receipt Step)
• Client Receipt Policy Template for Bookkeepers
• Hubdoc Alternatives for Solo Bookkeepers: How to Choose