Invoice vs receipt: what's the difference?

An invoice asks to be paid. A receipt confirms that payment arrived. They often describe the same sale with the same amounts, which is why they get mixed up, but they record different events and do different jobs in your books and your client's.

What an invoice is

An invoice is a request for payment. You send it when you've delivered the work or goods, or on an agreed schedule, such as a deposit before work starts. It tells the client what they owe, what it's for and when it's due, and until it's paid it's an open amount you're owed.

The bottom line of an invoice is a balance due with a date: "Balance due $2,397.00 by October 28, 2026."

What a receipt is

A receipt is proof of payment. You issue it after the money arrives, and it records how much was paid, when, how and for what. Its bottom line is an amount paid: "Received $2,397.00 by ACH on October 26, 2026. Paid in full."

A receipt for part of the price should also show what's still owed: "Received $1,500.00 deposit. Balance of $2,397.00 due on the final invoice."

Before payment and after payment

Timing is the simplest way to tell them apart. For most business sales the order is:

1. Quote or estimate: the price you're offering (optional).
2. Invoice: what's owed, sent after or during the work.
3. Payment.
4. Receipt: confirmation that the payment arrived.

Some sales skip steps. At a shop counter, payment and receipt happen at the same moment and there's no invoice. Online orders paid by card usually get a receipt, or an invoice already marked paid. A deposit adds a loop: an invoice for the deposit, a receipt when it's paid, then a final invoice that subtracts it.

The legal and tax role of each

In the US, both are business records. IRS Publication 583 lists invoices and receipts among the supporting documents for your income and expenses, and there's no general federal format for either. Where they differ is which date matters.

• Seller on the accrual method. Income generally counts once your right to it is fixed and the amount can be determined, which is usually when you've done the work and invoiced it. The invoice date is the one that matters.
• Seller on the cash method. Income counts when you receive it or it's made available to you, so the payment date on the receipt or bank deposit is the one that matters (IRS Publication 538).
• Buyer. An unpaid invoice shows a debt. The receipt, or a paid invoice with a bank record, shows the debt was settled. For travel, gift and car expenses, the IRS requires documentary evidence such as receipts for all lodging and for any other expense of $75 or more (Publication 463).
• Disputes. The invoice, backed by the contract or accepted quote, is your evidence of what's owed. The receipt is your client's evidence that they paid.

Between businesses, a receipt is usually a courtesy rather than a legal requirement, but some state laws require one in particular cases. New York, for example, requires landlords to give a written receipt when rent is paid in cash or by anything other than the tenant's personal check.

Outside the US, the invoice does more work, because it's what lets a business customer claim back tax:

• UK: a VAT-registered customer generally needs a valid VAT invoice to reclaim VAT. Sales of £250 or less including VAT can use a simplified invoice, which is why a till receipt with the right details can double as one. See UK VAT invoice requirements.
• Australia: a business needs a tax invoice to claim a GST credit on a purchase of more than $82.50 including GST. See Australian tax invoice requirements.
• Canada: the details a customer needs to claim input tax credits increase at $100 and $500. See Canadian GST/HST invoice requirements.

What each one contains

Invoice vs receipt at a glance

Related documents

• Quote: a fixed price for a defined job, valid for a set period, that becomes the basis of the invoice once the client accepts it. Quote generator
• Estimate: an informed guess at the price that can change as the job develops, so the final invoice may differ. Estimate generator
• Proforma invoice: a preliminary invoice sent before delivery, often so the buyer can prepay or arrange import paperwork. It isn't recorded as a sale; the final invoice follows when the goods ship or the work is done. Proforma invoice generator
• Credit note: reduces or cancels an invoice you've already issued, for a return, an overcharge or a canceled job, and quotes the original invoice number. Credit note generator
• Statement: a summary of every invoice, payment and credit for one client over a period, ending with the balance still owed. It's a reminder rather than a new charge, so it never takes an invoice number.
• Commercial invoice: the customs document for goods shipped across a border, listing what's in the shipment, its value and where it was made. Commercial invoice generator
• Rent receipt: a receipt for rent that shows the property, the period covered, the amount and the date paid. Rent receipt generator

Turning a paid invoice into a receipt

When a client pays in full, you don't need to retype anything:

1. Open the invoice. If you created it in this browser, it's in your local history, which keeps your last 50 invoices.
2. Choose Mark as paid → make receipt. The document becomes a receipt, with the receipt title and number prefix.
3. Check the amount and the payment date, then use the notes to say how it was paid and which invoice it settles: "Paid in full by ACH on October 26, 2026. Settles invoice INV-2026-0042."
4. Download the PDF and send it to the client.

Keep the invoice PDF you originally sent alongside the receipt, since the two record different events.

If the client paid only part, don't mark the invoice paid. Enter the payment in the amount paid field so the invoice shows the remaining balance, and issue a receipt for the part you received with the receipt generator. To track which invoices are paid across all your devices, Pro keeps an invoice history with paid and unpaid status.