Invoice vs receipt: what is the difference?
People mix these up all the time. The short version: an invoice asks for money, and a receipt shows that money was paid.
Invoice
An invoice goes out before payment. It lists what was sold or done, the amount owed, and when payment is due. The customer uses it to pay you and to record the expense.
Receipt
A receipt goes out after payment. It confirms the amount, the date, and how it was paid. The customer keeps it as proof, and you keep a copy as a record of income.
Side by side
- Timing: invoice before payment, receipt after
- Purpose: invoice requests payment, receipt confirms it
- Key details: invoice has a due date, receipt has a payment method and date paid
- Status: invoice means money is owed, receipt means it was received
Do you need both?
If you bill customers after the work is done, send an invoice, then a receipt once they pay. If the customer pays on the spot, a receipt alone is enough. For a paid invoice, a paid in full receipt that references the invoice number keeps the paper trail clean.
Questions
Can an invoice serve as a receipt?
Some businesses mark the invoice as paid and use it as the receipt. A separate receipt is clearer, especially if payment is made in parts.
Which one do I need for taxes?
Keep both. Invoices show what you billed, and receipts show what you actually received. Ask your accountant what you need to keep and for how long.
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General information, not legal, tax, or accounting advice. Rules vary by place.