Invoice vs Receipt: What's the Difference?
Updated
Invoices and receipts look alike: both list what was sold, the price and who it was sold to. But they do opposite jobs, and mixing them up can confuse your customers and your bookkeeping. Here's the difference, when to send each, and an example of both for the same sale.
The short answer
An invoice asks for payment. You send it before the customer pays, and it shows how much they owe and when it's due.
A receipt proves payment. You give it after the customer pays, and it shows how much they paid, when and how.
Invoice vs receipt at a glance
| Invoice | Receipt | |
|---|---|---|
| Purpose | Asks the customer to pay | Confirms the customer has paid |
| When | Before payment, after the sale or work | After payment |
| Key amounts | Total and balance due | Amount received |
| Key dates | Invoice date and due date | Date paid |
| Payment details | How to pay you | How the customer paid |
| For the seller | Tracks money owed to you | Records money received |
| For the buyer | A bill to pay | Proof of purchase, for refunds, warranties and expenses |
What is an invoice?
An invoice is a document a seller sends to a buyer asking to be paid for goods or services already delivered or agreed. It lists what was sold, the price, any tax and discounts, the total, the date payment is due and how to pay. Until it's paid, it represents money the customer owes you.
Businesses use invoices whenever the customer doesn't pay on the spot: freelance work, services billed after completion, and sales between companies on payment terms such as Net 30. Read our guide on how to make an invoice for every field explained.
What is a receipt?
A receipt is proof that a payment was made. It shows who paid, how much, on what date and by what method, and what the payment was for. If it pays an invoice, it usually references the invoice number.
Customers need receipts to claim expenses, get refunds or warranty service, and prove they paid. Sellers use them to record income. Shops give receipts at the till. For services and invoiced work, you send a receipt when the payment arrives.
Example: the same sale as an invoice and a receipt
A landscaping business invoices a customer for October's work. Two weeks later the customer pays by bank transfer, and the business sends a receipt.
1. The invoice: asking for payment
Green Leaf Landscaping
210 Elm Road, Columbus, OH 43215
[email protected]
INVOICE
# 1007
Bill To:
Daniel Reyes
14 Birch Lane, Columbus, OH 43221
| Item | Quantity | Rate | Amount |
|---|---|---|---|
| Lawn care package, October | 1 | $180.00 | $180.00 |
| Hedge trimming (hours) | 3 | $45.00 | $135.00 |
| Green waste removal | 1 | $40.00 | $40.00 |
Notes:
Please pay by bank transfer to Green Leaf Landscaping or by card at greenleaf.example/pay.
- Subtotal:
- $355.00
- Total:
- $355.00
- Balance Due:
- $355.00
2. The receipt: confirming payment
Green Leaf Landscaping
210 Elm Road, Columbus, OH 43215
[email protected]
RECEIPT
# 1008
Received From:
Daniel Reyes
14 Birch Lane, Columbus, OH 43221
| Item | Quantity | Rate | Amount |
|---|---|---|---|
| Lawn care package, October | 1 | $180.00 | $180.00 |
| Hedge trimming (hours) | 3 | $45.00 | $135.00 |
| Green waste removal | 1 | $40.00 | $40.00 |
Notes:
Payment received in full for invoice 1007. Thank you!
- Subtotal:
- $355.00
- Total:
- $355.00
- Amount Received:
- $355.00
Notice what changed: the receipt has its own number, says Received From instead of Bill To, swaps the due date for the date paid and payment method, references the invoice, and shows the amount received instead of a balance due.
When to send which
- Customer pays later (services, freelance work, business clients): send an invoice, then a receipt once paid.
- Customer pays on the spot (shop, market, delivery paid in cash): give a receipt only.
- Customer pays a deposit: send an invoice for the deposit, a receipt for it, and later an invoice for the balance showing the deposit as amount paid.
- Customer asks for proof of payment: send a receipt, or the invoice marked as paid.
- Customer pays in advance before you deliver: send a proforma invoice to request the money, then a receipt or final invoice.
With a free invoices.net account you can mark an invoice as paid in one click, so your list always shows what's been paid and what's still outstanding.
Other documents you might need
- Quote or estimate: the price, before the customer agrees to buy.
- Proforma invoice: a preliminary invoice that asks for payment before delivery.
- Credit note: reduces or cancels an invoice, for example after a refund or a mistake.
- Account statement: a summary of all invoices and payments for one customer over a period.
Frequently asked questions
Is an invoice the same as a receipt?
No. An invoice is a request for payment, sent before the customer pays. A receipt is proof of payment, given after the customer has paid. They often list the same items and amounts, but they do opposite jobs.
Can an invoice be used as a receipt?
An invoice marked as paid, showing the payment date, method and a balance due of zero, is often accepted as proof of payment. But many customers, especially businesses claiming expenses, prefer or need a separate receipt.
Do I need to send both an invoice and a receipt?
Not always. If a customer pays on the spot, a receipt alone is enough. If you invoice first and the customer pays later, send a receipt (or the paid invoice) when the money arrives, especially if the customer asks for one.
Which comes first, the invoice or the receipt?
The invoice comes first: it asks for payment. The receipt comes after the payment is made. If the customer pays immediately, for example in a shop, there may be no invoice at all, only a receipt.
What is a sales receipt?
A sales receipt is a receipt given at the time of sale, when the customer pays straight away. It replaces the invoice-then-receipt flow for in-person or instant sales.
What is the difference between an invoice and a bill?
They are the same document seen from two sides. The seller sends an invoice, and the buyer receives it as a bill to pay. In everyday use, the words are often interchangeable.
How long should I keep invoices and receipts?
Keep copies of every invoice and receipt for as long as your tax authority requires, often five to seven years, sometimes longer. Check the rules where you live.
Can I make a receipt for free?
Yes. The free receipt generator on invoices.net lets you fill in a receipt online and download it as a PDF, with no sign-up. If you already sent an invoice, you can also mark it as paid.
Related guides
- What Is a Proforma Invoice?What a proforma invoice is, when to use one, and how it differs from an invoice and a quote.
- UK VAT InvoiceWhat HMRC requires on a VAT invoice, full vs simplified invoices, and a worked example.
- Canada GST/HST InvoiceWhat the CRA requires on GST/HST invoices, provincial rates, and a worked example.
- Australia Tax InvoiceThe ATO's tax invoice requirements, GST at 10%, invoices without GST, and an example.
- India GST InvoiceMandatory fields under Rule 46, CGST/SGST vs IGST, HSN/SAC codes, with an example.
- Contractor InvoiceLabor and materials, deposits, change orders and progress billing for contractors and trades.