One asks for the money. One proves it arrived.
The short version: an invoice is a request for payment, sent before the money arrives. A receipt is proof of payment, issued after. Most small businesses need both for the same sale — the invoice gets you paid, the receipt closes the loop and keeps your records defensible. Here's the full difference, plus the parts most guides skip: refunds, deposits, and how long you have to keep each one.
Plain-English answer · Both documents explained · Free to create either
The one-line answer — Invoice = "please pay me." Receipt = "you paid me." If the money hasn't arrived yet, you want an invoice. If it has, you want a receipt.
Invoice: sent before payment, when the work is done or goods are delivered. Receipt: issued after the money has actually landed. This is the difference everything else follows from.
Invoice: requests payment and sets the terms — amount, due date, how to pay. Receipt: confirms the transaction is complete and no money is outstanding.
Invoice: invoice number, issue date, due date, itemised charges, tax, total owed, payment details. Receipt: receipt number, date paid, what was paid for, amount paid, and the payment method.
Invoice: you rely on it to get paid and to chase late payment. Receipt: your customer relies on it for their own records, warranty claims and expense claims.
An invoice is evidence a debt was claimed. A receipt is evidence it was settled. In a dispute the receipt is the stronger document, because it proves the money moved.
Invoices support the income you declare. Receipts support both — proof of what you collected, and, when you're the buyer, proof of what you spent and can claim.
Itemise what you delivered, set a due date and payment method, and send it. Nothing is proven yet; you're asking to be paid.
Once payment clears, send a receipt showing the amount and how it was paid. For cash this matters most — there's no bank record without it.
File the invoice and the receipt against the same job. That pair is what makes your books defensible if anyone ever asks.
Create an invoice if you're still waiting to be paid, or a receipt if the money has landed. Both are free and take about a minute.
Create a free invoiceSometimes — an invoice clearly marked PAID, with the date and method of payment on it, is widely accepted as proof of payment. It's the marking that matters, not the word at the top. But a separate receipt is cleaner: it removes any ambiguity about whether the amount shown was requested or actually received, which is exactly what gets argued about later.
For most sales, yes — the invoice gets you paid and the receipt closes it out. The exception is point-of-sale: if the customer pays immediately, a receipt alone is enough because there was never a period where money was owed. If you invoiced first, issue the receipt too.
Issue a receipt for the amount actually received, not the full invoice total. So a $2,000 job with a $500 deposit gets a $500 receipt now, and the invoice stays open for the remaining $1,500. Receipting the full amount before you've been paid it is a common and expensive bookkeeping mistake.
No. A refund is normally handled with a credit note, which reverses part or all of an invoice, plus a record of the money going back out. Issuing a second receipt for a refund double-counts the transaction and makes your books harder to reconcile.
It depends on your country, and this is the part most guides leave out. Australia's ATO requires most business records to be kept five years from when they were prepared or the transaction completed. The UK and US commonly work to five to seven years. Check your own tax authority — but keep both documents for the same period, because they only prove the transaction together.
Practically, yes — it's usually the same document seen from the other side. What you send as an invoice arrives as a bill to your customer. 'Bill' tends to be used for immediate consumer payments, 'invoice' for business terms like net 30, but the document does the same job.
Create a free invoice · Free receipt template · Payment receipt template · Free work order template · How to ask for payment