Invoice vs Receipt Differences

What an Invoice Is
What a Receipt Is

An invoice asks a customer to pay for goods or services and shows what they owe, by when. A receipt confirms that a payment was made: how much, when and how. You send the invoice before you're paid (or when you're paid, for a sale paid on the spot), and the receipt after the money arrives. In the US, the IRS treats both as supporting documents to keep with your business records.

What an Invoice Is

OpenStax's Principles of Accounting (§7.1) describes an invoice, "also known as a bill", as a source document: "It provides evidence of the sale and your obligation to pay that amount." Its chapter 7 key terms define a source document as a "paper document or electronic record that provides evidence that a transaction has occurred and includes details about the transaction".

An invoice includes:

Your business details and the customer's
An invoice number and the invoice date
What you're charging for, with quantities, rates and totals
Tax, if it applies
The due date and how to pay

What a Receipt Is

A receipt records a payment that has already been made. It includes:

The date of the payment
The amount paid
How it was paid, such as card, bank transfer, check or cash
What it pays for, such as the invoice number
Any balance still owed after the payment

When to Send Each

You deliver the goods or services, or reach a billing date in your agreement.
You send the invoice with a due date.
The customer pays.
You send a receipt for the payment.

For a sale paid on the spot, such as in a shop, the customer pays straight away and gets a receipt. A separate invoice isn't needed unless the customer asks for one.

What the IRS Says to Keep (US)

These are US federal recordkeeping points from IRS Publication 583, Starting a Business and Keeping Records (revised December 2024). Ask your accountant what to keep for your business.

Both are supporting documents: "Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. These documents contain information you need to record in your books."
Income records: the documents that show gross receipts listed in Publication 583 include "Receipt books." and "Invoices."
Proof of payment isn't enough on its own: "Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost."

So keep both: the invoice shows what the charge was for, and the receipt shows it was paid.

Worked Example: One Invoice, Two Receipts

These are sample figures for a fictional web designer.

Invoice #1042, dated March 2, due March 16

Website design: $1,000.00
Hosting setup: $200.00
Total due: $1,000.00 + $200.00 = $1,200.00

Receipt 1, March 9: $700.00 paid by card against invoice #1042. Balance after this payment: $1,200.00 − $700.00 = $500.00

Receipt 2, March 16: $500.00 paid by bank transfer against invoice #1042. Balance after this payment: $500.00 − $500.00 = $0.00

The invoice shows what was charged; the two receipts show each payment and the balance left after it.

Invoices and Receipts in Billed

Billed's invoice software page says: "After a client pays, you can send them a payment receipt." Its expense tracking page adds: "When a client pays one of your invoices, Billed can send them a payment receipt."

If you need a receipt you fill in yourself, the receipt templates page lists a payment receipt that "Confirms payment of one invoice: the invoice number, the amount paid now, how it was paid and the balance after it." See the payment receipt template, the simple receipt template and the cash receipt template. For invoices, see the invoice templates.

Related Guides

FAQ

Can an invoice also be a receipt?

Not on its own. An invoice asks for payment and a receipt confirms a payment was made. Once an invoice is paid, a receipt or a payment record that shows the date, amount and method confirms the payment.

Do I need to send both an invoice and a receipt?

Send an invoice when you ask to be paid, and a receipt when the payment arrives. In the sample on this page, one $1,200.00 invoice is paid in two parts, with a receipt for each payment.

Which document do I need to keep for taxes in the US?

Keep both. IRS Publication 583 lists invoices and receipts as supporting documents, and says that proof of payment by itself doesn't establish that you're entitled to a deduction, so you should also keep documents such as invoices that show you incurred the cost. Ask your accountant what applies to you.

Can Billed send a receipt when a client pays?

Billed's invoice software page says: "After a client pays, you can send them a payment receipt."

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Invoice vs. Receipt: Key Differences for Businesses