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Is Invoice A Receipt? The Differences Between An Invoice And A Receipt 

Whether you are a freelancer or a small business owner, you’re likely very acquainted with the terms “invoice,” “receipt,” and “bills.” Although these are crucial documents for small business owners or entrepreneurs, the differences between these documents aren’t always clear. Is invoice a receipt? What are the purposes of each document? 

This article will help you understand what invoices and receipts are for, the similarities and differences, examples of an invoice and a receipt, followed by a handy comparison chart. 

Similarities between an invoice and a receipt

Invoices and receipts are preliminary documents essential to the accounting process as they are used to record sales transactions and account for requests and confirmations for payments. They can be in digital or physical form and help mitigate the risk of verbal agreements by clearly outlining your transactions’ details. These details are necessary when creating accurate financial reports. Having clear documentation of your cash flow guarantees a seamless accounting process so you can rest easy come tax season. 

Differences between an invoice and a receipt

Despite the similarities mentioned above, invoices and receipts are distinct documents used at entirely different stages of the payment process. 

If you haven’t already seen our articles about invoices, take a moment to read about what invoices are, what they include, and their different types. In this article, we’ll be going over the definition and purpose of receipts.

While an invoice is a request for payment, a receipt is proof of payment. Invoices are typically issued to a customer after they have received their goods or services but before payment has been made. A receipt is a document confirming that the customer has paid for the goods or services that your business provided. 

In general, a receipt contains much less information than an invoice. Though it doesn’t require an identification number or customer information, in every receipt you issue, you should include the following information: 

  • Your business name, logo, and contact information 
  • Date of issue
  • List of goods or services 
  • Additional fees, taxes, or discounts applied 
  • Total paid amount 
  • Payment method

Note: Invoices and bills are also commonly confused. Invoices and bills are records of a sale that indicate how much a customer owes your business, and both are issued before a customer has made the payment. However, a bill is simply a document from the seller that requests immediate payment. Typically, bills do not include an itemized list of products or services. Cable or electronic payment requests are the most common example of bills. Normally, when receiving a bill, the customer will be asked to pay it within a few days or weeks. 

On the other hand, an invoice confirms that the seller will collect the payment for products or services at a later date. For this reason, they are especially common among companies that sell in large quantities (e.g., manufacturer or wholesalers) and among freelance workers that provide services rather than goods (e.g., content writers or graphic designers). 

Examples of an invoice and a receipt

This sample invoice from Stripe demonstrates how an invoice differs from a receipt. This invoice comes with a unique invoice number and shows the amount owing on the bill for the goods and services provided and the due date for payment. The seller will send this invoice to the client as a request for payment. 

Is invoice a receipt a Stripe sample invoice
A Stripe sample invoice

The below sample receipt from Stripe shows some key differences between a receipt and an invoice. The receipt shows the amount paid, the date the payment was made, and the payment method that the buyer used. When a transaction is processed, Stripe creates a receipt at the same time the payment is made and sends the receipt to the buyer as proof of payment. 

A Stripe sample receipt
A Stripe sample receipt

This sample receipt from Stripe shows some key differences between a receipt and an invoice. The receipt shows the amount paid, the date the payment was made, and the method of payment the buyer used. In this case, it’s a Mastercard credit card payment. In this example, Stripe created the receipt at the time the payment was accepted and offered the receipt to the buyer as proof of the completed transaction.

A comparison chart between an invoice and a receipt

To help you better visualize the differences between the two documents, here are some key takeaways in this handy chart: 

BASIS FOR COMPARISONINVOICERECEIPT
DefinitionAn invoice is a document that the seller sends to a customer to request payment for products or services. A receipt is a document confirming that the services or products have already been paid for. 
Time of issueBefore the payment.After the payment.
PurposeTo act as an official request for payment and also a proof of sale for the business. To act as evidence that the payment for product or service has been completed.
DetailsYour business name, logo, and contact information
The customer’s name and contact information
An invoice number
The issued date
The due date and any other payment terms
All acceptable payment method
A detailed description of all purchased goods and services, including price and quantity
The total amount owed, including any taxes, discounts, and fees
Your business name, logo, and contact information
The date of sale
A detailed description of all purchased goods and services, including price and quantity
The total amount paid, including any taxes, fees, and discounts
The payment method

The bottom line

We hope this article helps you better understand the similarities and differences between invoices and receipts. Depending on what you sell or how your business works, you might decide to use invoices more than receipts or vice versa, but most likely, you’ll use some combination of both. By understanding the difference between invoices and receipts, you’ll be able to distinguish when to use one or the other, ensuring that you and your customer are always using the right transaction documentation. 

AccountDock is a powerful software that allows Stripe-powered businesses to provide their customers with clear, well-presented billing history. By integrating AccountDock into your business, you will give your customers the ability to view and manage their invoices and receipts at any given time or place, and with any device. They can check if their invoices are successfully paid or not and the reason for failed payments. They can also send the invoices or receipts by email from the web, convert the invoice to PDFs, and so much more. 

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