Invoice vs Receipt: What Is the Difference?
Invoices and receipts are often confused, but they sit at opposite ends of the same transaction. One asks for money, the other confirms it arrived.
What is an invoice?
An invoice is issued before payment. It lists what was sold, how much is owed and when payment is due. It creates an account receivable in your books.
What is a receipt?
A receipt is issued after payment. It confirms the amount paid, the date and the method. Customers use receipts as proof of purchase for warranties, expenses and tax deductions.
Key differences at a glance
- Timing: invoice before payment, receipt after
- Purpose: request payment vs. prove payment
- Accounting: receivable vs. settled transaction
- Legal weight: a receipt is proof of payment, an invoice is not
Do you need both?
For most business-to-business work an invoice is enough, because the bank transfer is the proof. For retail, cash and card sales, a receipt is the primary document. Issuing both is never wrong.