The short answer: write the invoice exactly as you would for a bank transfer, with its own number in your normal sequence, then mark it “Paid in cash” with the date and the amount received. That document is the customer’s receipt. Keep a copy and record the cash the day you take it.
Wording to copy
Paid in full: PAID IN CASH: £240.00 received on 9 October 2026. Thank you.
Part paid: Cash received 9 October 2026: £100.00. Balance due: £140.00 by 23 October 2026.
Paid later than the invoice date: Invoice INV-2026-052 dated 1 October 2026, paid in cash on 9 October 2026. Balance: nil.
Example
From Ash Gardens, Park Lane, York
To Mrs P. Jones, Church Street, York
| Hedge cutting and green waste removal, 9 October 2026 | £240.00 |
| Total | £240.00 |
PAID IN CASH £240.00 on 9 October 2026. Thank you.
Names and figures are made up. The same layout works if the invoice was sent first and the cash came later: keep the original number and date, and add the payment line.
Records the tax authorities expect
- UK: self-employed people must keep records of all sales and income; proof includes sales invoices, till rolls and bank slips. Keep them for at least 5 years after the 31 January deadline for the tax year (GOV.UK: what records to keep, how long). VAT-registered businesses keep VAT records for at least 6 years (VAT Notice 700/21).
- US: invoices and receipt books are among the documents the IRS lists as showing gross receipts; keep them until the period of limitations for the return runs out, generally 3 years (IRS Publication 583).
Bank cash regularly and keep a simple log (date, invoice number, customer, amount), so your deposits match your invoices.
Large cash payments
- US, over $10,000: a business that receives more than $10,000 in cash in one transaction, or in related transactions, must file Form 8300 within 15 days and give the payer a written statement by 31 January of the following year. The IRS says the invoice can serve as that statement if it includes the required information: your business name and address, a contact name and phone number, the total reportable cash received in the 12-month period, and a line saying the information is being furnished to the IRS (IRS Form 8300 reference guide).
- UK: if customers pay you in large amounts of cash, your business may need to be registered for an anti-money laundering scheme (GOV.UK).
Mistakes with cash invoices
- Leaving cash jobs out of the invoice sequence. Gaps are the first thing anyone checking your records asks about.
- Giving a new number when you mark an invoice paid. The paid copy keeps the original number.
- Writing “paid” without the date and amount, so it can’t serve as a receipt.
Make the invoice in the invoice generator and put the paid-in-cash line in the notes. A separate receipt instead? See invoice vs receipt.
Sources checked 9 October 2026: GOV.UK self-employed records and payment obligations, HMRC VAT Notice 700/21, IRS Publication 583 and Form 8300 reference guide.