Invoice vs. Receipt: What's the Difference?

An invoice asks for payment, a receipt confirms it. When to use each one, and what goes on them.

Invoices and receipts look similar: both have your business details, the client's name, line items and a total. But they do opposite jobs. An invoice asks for payment. A receipt confirms that payment was received. Mixing them up confuses clients and leaves gaps in your records, so here's how to tell them apart and when to use each.

The short version

• Invoice: sent before payment. Says "you owe this amount, by this date, for this work."
• Receipt: given after payment. Says "I received this amount, on this date, by this method, for this work."

The order is: estimate or quote (optional), then invoice, then payment, then receipt.

What an invoice is for

An invoice is a formal request for payment. It lists what you did or delivered, the amount due and the terms: when it's due, how to pay and what happens if it's late. Businesses need invoices to approve and record their expenses, and you need them to track who owes you money. An invoice usually includes:

• An invoice number and invoice date
• Your details and the client's, under "Bill to"
• Line items with quantities and prices
• Tax, discounts and any deposit already paid
• The balance due, due date and payment methods

You can make one with the invoice generator, or start from a trade template such as the handyman invoice template. For the full walkthrough, see how to write an invoice.

What a receipt is for

A receipt is proof of payment. It protects the person who paid, who can show they've settled the bill, and it protects you, because it records exactly what was paid and when. Receipts matter most when the payment leaves no automatic trail, such as cash, or when the client needs it for their records, for a reimbursement or for taxes. A receipt usually includes:

• A receipt number and the payment date
• Who paid (in a "Received from" field) and who received the payment
• What the payment was for, ideally referencing the invoice number
• The amount paid and the payment method (cash, check, card, transfer)
• Any remaining balance, if it was a partial payment

The receipt maker creates one in a minute, and there are specific templates such as the cash receipt, the deposit receipt and the payment receipt.

Side by side

• Timing: invoice before payment; receipt after payment.
• Purpose: invoice requests money; receipt confirms money was received.
• Key date: invoice has a due date; receipt has a payment date.
• Payment method: invoice lists the methods the client can use; receipt states the method that was used.
• Balance: invoice shows the balance due; receipt shows the amount paid and any balance left.

Do you always need both?

Not always. When a customer pays on the spot, for example after a cleaning or a quick repair, many businesses skip the invoice and give only a receipt, or they send one document marked "Paid". When there's a gap between the work and the payment, you need an invoice to ask for the money; a receipt is then a courtesy that many clients appreciate and some require.

Some situations where a receipt is especially useful:

• Cash payments, where there's no bank record.
• Deposits and installments, so both sides know how much has been paid and how much is left.
• Rent, where tenants may need proof of payment. See the rent receipt template.
• Clients who get reimbursed, by an employer, an insurer or a business partner.

Can an invoice become a receipt?

Yes, and it's a handy way to keep the two consistent. When the client pays, you can issue a receipt with the same line items and total, add the payment date and method, and mark it paid. In the Presupuestado editor, tapping "Mark as paid" turns the document into a receipt with the same lines, so you don't have to type everything again.

What about a "paid invoice"?

A paid invoice is an invoice stamped or marked as paid. Many clients accept it as proof of payment, but a receipt is clearer because it states the payment date, amount and method in its own right. If a client asks for a receipt, give them a proper one.

Keep copies of both

Whatever you send, keep a copy. Invoices show what you billed and when; receipts show what you collected. Together they make your bookkeeping and taxes much easier, and they settle most disagreements in a few seconds. More on receipts in how to write a receipt.

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Frequently asked questions