Total receipts are used to calculate taxes.
Total receipts is also referred to as gross receipts in the business world. Primarily, this calculation is necessary for filing a tax return with the Internal Revenue Service (IRS), whether the organization is a for-profit business or a non-profit organization. Specific requirements for reporting gross receipts vary from state to state so be sure to read the specifics on your tax return form.
What Total Receipts Include
Total receipts is a report of all the income of a business for that year, whether from products sold or service fees. Whatever money you have received goes under "total receipts." For non-profit organizations, it includes all donations and grants as well as service fees.
Total Receipts vs. Total Revenue
Total revenue is a measure of the change in a business' financial statement. It looks at the difference between money received and money spent (total expenses) and measures the business' profit or loss. Total receipts do not take into account the organization's expenses at all but measure only the money received.
Counting Taxes
When calculating total receipts, do not include any sales taxes paid by the customer on an item sold by the organization. Since the organization does not actually receive that money, it is not considered part of the "total receipts."
Purposes of Total Receipts
Calculating total receipts is necessary for filing both state and federal taxes, though specific guidelines and taxes vary from state to state. Total receipts should also be listed on financial statements in order to keep an accurate record of the business' finances and in order to properly fill out tax returns.
