Invoice vs receipt: what's the difference?

An invoice asks for payment, a receipt confirms it

The difference between an invoice and a receipt comes down to where the money is. An invoice is a request for payment: it tells your customer what you supplied, what they owe, and when and how to pay, so you send it while the amount is still outstanding. A receipt is a confirmation of payment: it records that you have been paid, how much, on what date and by what method, so you can only issue it once the money has arrived. The two describe the same sale at different moments, which is why they're easy to mix up, but in short the invoice opens the debt and the receipt closes it.

The timing follows from that. In most freelance and business work you deliver first and then send an invoice dated that day, with a due date some weeks later; the gap between the two is your payment terms, which the guide to Net 30 and other payment terms explains. The customer pays by the due date, and only then can a receipt be written, dated the day the money came in. Between businesses that pay by bank transfer the receipt is often left out altogether, because the bank statement already shows the payment, but a customer who asks for one should get one.

That also answers the common question of whether an invoice counts as a receipt: on its own, it doesn't. An invoice shows that money was asked for, not that it was paid, so someone who has to prove payment to a third party, such as an employee claiming expenses or a homeowner sending a repair bill to an insurer, needs either a receipt or an invoice clearly marked as paid. Without either, the best they can offer is the invoice next to their own bank statement, which is clumsier and shows more of their finances than they might like.

What an invoice shows and what a receipt shows

Because they do different jobs, the two documents carry different details. An invoice gives your customer everything they need to pay you and to file the bill: a unique invoice number, the date, your name and address and theirs, a description of what you supplied with quantities and prices, any tax, the total due, the due date, and how to pay, such as your bank details. The guide to what an invoice is and what it contains goes through these one at a time. A receipt is shorter, because nothing is being asked for any more: it says who paid, what for, how much, on what date and by what method, and it has a number of its own.

Side by side, the differences look like this:

An example makes this concrete. Say you're a photographer in the US and you take new staff portraits for a dental clinic. On March 3 you send invoice 1042 for $850.00, due in 30 days, with your routing and account number at the bottom. The clinic pays by bank transfer on March 20, and its office manager asks for a receipt for their files. That receipt, R-17, says the money was received from the clinic, lists the same portraits and the same $850.00, gives March 20 as the date paid and bank transfer as the method, and refers to invoice 1042, but it has no due date and no bank details, because there is nothing left to pay.

The reference back to the invoice number is the detail most often left off, and it matters more than it looks. A customer who pays several invoices at once, or pays one in parts, needs to know which bill each receipt settles, and so do you when you check later which invoices are still open. If the clinic had paid only the first $300.00 of invoice 1042, the receipt should say that it is a part payment and that the rest is still due.

When one document does both

Sometimes the invoice and the receipt become one document, because the request for money and the payment happen at the same moment, or because the customer only wants one piece of paper. The most familiar case is the till receipt (a register receipt in the US) from a shop: you pay at the counter, and the slip you're handed both describes the sale and confirms the payment. A market stall, a hairdresser or a tradesperson paid in cash on the day is in the same position. For a sale like that to a private customer, the receipt is the natural document, because there was never an amount outstanding that needed invoicing.

The second case is an invoice marked as paid, which in the UK is often called a receipted invoice. People ask for one when they need to show someone else that a bill was both issued and settled: a tenant claiming the cost of a repair back from a landlord, a homeowner sending a plumber's bill to an insurer, a charity reporting to a funder. If you're the plumber, the receipted invoice is simply your original invoice for £340.00, sent in February, with a clear note added such as "Paid in full by bank transfer on 14 March 2026." It keeps its original number and amounts, so it is still the same invoice, now with proof that it was paid.

The third case runs the other way: a business customer pays on the spot but needs a proper invoice for its own books, so a till slip won't do. You can then issue an invoice as usual and mark it as paid, or issue the invoice and a receipt that refers to it, as long as the two agree on number and amount. What you shouldn't do is create a second invoice for a sale you have already invoiced just to show it as paid, because two invoices for one sale put your numbering and your records out of step, and invite the customer to pay twice.

Which one the tax rules care about, and what to keep

When it comes to tax, the invoice is the document that matters, and a receipt is mainly a record that payment was made. In the UK, the VAT rules (VAT being the tax added to the price of most goods and services) are written around the VAT invoice: the invoice a VAT-registered business gives its business customers, showing its VAT registration number, the VAT rate and the amount of VAT. Numbering is part of it too, because Every invoice needs a unique identification number, and a VAT invoice needs a sequential number, from one or more series, that uniquely identifies it. The guide to invoices in the UK goes through everything a VAT invoice has to show, item by item.

The VAT on that invoice has to be right, and the rules cut both ways. Only a VAT-registered business may issue a VAT invoice: if you are not registered you must not show VAT, and if you do, HMRC can charge a penalty of up to 100% of the VAT shown and still collect that amount from you. If a VAT invoice shows more VAT than is due, you must pay HMRC the higher amount unless you correct the error with your customer by issuing a credit note. If you aren't registered, keep VAT off your receipts as carefully as you keep it off your invoices, because a receipt that splits the price into a net amount and VAT gives the same false impression. Some businesses add the line "Not registered for VAT." to both, so customers don't wonder where the VAT went.

For US businesses the starting point is different. No federal law prescribes invoice numbering; giving each invoice a unique number is customary, and invoices to federal agencies must carry an invoice number, account number or other identifying number agreed in the contract. The tax that does appear on invoices and receipts is sales tax, and its rules differ from state to state. Where you charge it, show it on its own line on the invoice and repeat the same figure on the receipt, so the customer can see how much of the payment was tax. Charge only what is actually due: As a rule, sales tax you charge by mistake, or charge too much of, is not yours to keep: in California it must be returned to the customer or else paid to the state, and in Texas the state will not refund a seller until the seller has refunded or credited the customer. The details differ by state, so check with each state where you collect sales tax.

What to keep follows from what each document proves. As the seller, keep a copy of every invoice you issue, including any that were withdrawn or never paid, a copy of every receipt you give, and the bank records that show the money arriving, so each invoice can be matched to its payment. A business customer keeps the invoices it receives for its own accounts and tax records, and the receipts or paid invoices as proof that it paid; a private customer mostly needs the receipt, for returns and guarantees. Plan on keeping records for 6 years in the UK and 3 years in the US, and file each receipt with the invoice it settles, because on its own a receipt tells only half the story.

Making an invoice and a receipt in the maker

The free maker makes both documents and links them in the way this page describes. An invoice has a due date and your payment details. A receipt has its own number series (R-1, R-2 and so on), shows the date paid and the payment method in place of a due date, names the person or business it was received from, and asks for nothing. Receipts sit on their own tab in the overview and never count in your invoice totals or the VAT summary, so issuing a receipt for an invoice doesn't count the same sale twice.

For the usual case, an invoice that has now been paid, the steps are these:

1. Make the invoice: enter your business details once, choose or add the client, and add the lines with quantity, price and tax rate. Download the PDF, print it, or, with a free account, send it by email or as a link.
2. When the money arrives, open the invoice and choose Create receipt. The receipt takes over the client, the lines and the amounts, shows the invoice number, and the invoice is marked as paid.
3. Set the date the payment came in and how it was made, such as cash, card or bank transfer.
4. Check the receipt, then download it as a PDF or print it and give it to your customer.

For a cash sale, or anything else that was never invoiced, make a receipt on its own instead; the receipt template page explains what to put on it. If a customer asks for a receipted invoice rather than a separate receipt, add the payment note to the invoice's notes and download it again. The maker doesn't collect payments for you (apart from showing a PayPal link) and doesn't send payment reminders, so the receipt is something you create yourself once you've seen the money arrive.