Invoice vs receipt

The difference is one word: timing. An invoice asks for money. A receipt confirms money arrived. Sending the wrong one is a common mistake, and it quietly delays payment because the client's accounts team cannot process it.

Make an invoice or receipt free →

Side by side

	Invoice	Receipt
Purpose	Requests payment	Proves payment was made
Sent	Before payment	After payment
Shows	Amount due, due date	Amount paid, date paid, method
Client uses it to	Approve and pay	Prove the expense
You use it to	Track money owed	Close the record
Can be chased	Yes	No — it is already settled

What goes on an invoice

An invoice must give the client everything needed to approve and pay:

• The word "Invoice", so it is not mistaken for a quote
• A unique invoice number
• Your details and the client's details
• Issue date and a due date
• Itemised work with quantity, rate and amount
• Subtotal, tax, and the total due
• Payment instructions

What goes on a receipt

A receipt is a record, so it looks backwards rather than forwards:

• The word "Receipt"
• The invoice number it relates to
• The amount actually paid
• The date payment was received
• The payment method
• Any remaining balance, if it was partial

Notice what a receipt does not have: a due date. Nothing is due.

The documents people confuse with these

Quote or estimate

A price offered before work begins. It is not a request for payment and creates no obligation to pay. Label it clearly, because a quote mistaken for an invoice can be paid early — or worse, treated as final when the scope later changes.

Proforma invoice

A document that looks like an invoice but is issued before the work or goods are finalised, often so the buyer can arrange funds or clear customs. It is not a demand for payment and is usually not entered as a payable. If a client asks for a proforma, do not number it in the same sequence as your real invoices.

Credit note

The reverse of an invoice. If you overcharged, or the client returned something, a credit note cancels part or all of an invoice. Never fix a mistake by deleting an invoice and reissuing it under the same number — issue a credit note and a fresh invoice.

Purchase order

Issued by the client, not you. It authorises the spend before you invoice. Many companies will not pay an invoice that does not quote their PO number, so always ask whether one is needed.

The order things happen in

1. Quote — you offer a price
2. Purchase order — the client authorises it (not always used)
3. Work is delivered
4. Invoice — you request payment
5. Client pays
6. Receipt — you confirm it arrived

Do you have to send a receipt?

For a bank transfer, often not — the client's own bank statement is their proof. For cash it matters much more, since there is otherwise no record at all. If a client asks for one, send it; it takes a minute and it is sometimes needed for their own tax records.

A simple approach: send receipts for cash and card payments, and on request for everything else.

Common mistakes

• Labelling an invoice "Receipt". Accounts teams file receipts, they do not pay them. Your money sits in a folder.
• Reusing invoice numbers on receipts. Give receipts their own reference, and point it at the invoice number.
• Numbering proforma invoices in your real sequence, which creates gaps and confuses your records.
• Deleting an invoice to correct it. Use a credit note so the trail stays intact.

Make an invoice now

Our free generator produces a clear, correctly labelled invoice with sequential numbering, a notes field for payment details, and a clean PDF. No signup, and nothing you type leaves your browser.

Create your invoice free →