How to Differentiate Receipts from Invoices


For an ordinary person, receipts and invoices are the same and there seems to be no difference at all. However, for someone who is running a business that sells goods and/or services, the difference between the two is huge. When a customer decides to purchase a good or service, he or she enters an agreement to do business with the seller and usually completes the transaction through monetary payment. To make the transaction official, the seller will usually issue a receipt or invoice to record the sale.

106+ FREE INVOICE Templates - Download Now Adobe PDF, Microsoft Word (DOC), Microsoft Excel (XLS), Adobe Photoshop (PSD), Google Docs, Adobe InDesign (INDD & IDML), Apple (MAC) Pages, Google Sheets (Spreadsheets), Microsoft Publisher, Apple (MAC) Numbers, Adobe Illustrator (AI)

Hence, these are legal business documents used to record the amount of money paid or owed for with regards to the products and services that are sold. That is why customers are often left confused by the similarities between the two documents. However, a receipt and an invoice are different documents with distinctive purposes.

All About Invoices

  • Definition of an Invoice

According to an article published at Wikipedia, “An invoice, bill or tab, is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer”. It is often issued before the payment is made. The seller biller sends the copy of the invoice to the client, in the hopes of getting the payment within a set period of time.

  • Elements of an Invoice

The elements that are listed on an invoice include the following: the name of both vendor and customers, the business address, contact details of the vendor (phone numbers, email address, and fax number), the goods and services sold, the quantity, the prices, the date issuance of the invoice, the invoice number, and the total amount to be paid.

  • Types of Invoice

An invoice can come in different types: Pro-forma invoicecredit memo, commercial invoice, debit memo, self-billing invoice, timesheet, statement, progress billing, collective invoicing, recurring invoicing, electronic invoicing.

  • Invoice Uses

An official invoice is a tool that is often used to request payment from the customers, monitor sales, manage and control inventory, and facilitate goods and/or services delivered. Moreover, you can use the invoice to track your revenues in the future, as well as manage and build strong customer relationships by providing them easy payment options.

  • How to Write an Invoice

  1. Write the name of the company at the top of the document.
  2. Make sure to include essential information, such as the business address, contact numbers, and other relevant details, below the company name (header).
  3. Add the name and address of the customer.
  4. Assign a unique identification number for each of your customers.
  5. Create a unique invoice number for the transaction.
  6. Write down the date the invoice was written.
  7. List down the services that were provided to the customer, as well as their corresponding prices.
  8. Add the prices to get the subtotal.
  9. Add additional fees, such as the tax rate and shipment (if any).
  10. Get the total amount and keep a record of the invoice.
  11. Provide customers with payment options.
  12. Make sure to write down the due date of the payment so that your customer will be able to settle the amount on or before the due date.
  13. Send the invoice to your customers.
  14. Collect on your invoices.

Sample Invoice Templates that You Can Download

Free Download Purolator Commercial Business Invoice Template

free download commercial business invoice template page 0011 788x1020

Commercial Invoice Template Word

commercial invoice template word 1 788x1115

International Commercial Invoice Template PDF

international commercial invoice template pdf page 001 788x1020

Export Commercial Invoice Template PDF

export commercial invoice template pdf page 001 788x1020

All About Receipts

  • Definition of a Receipt

According to an article that is published at, “A receipt is a written acknowledgment that a person has received money or property in payment following a sale or other transfer of goods or provision of a service. It is a legal document that serves as a proof of ownership after a payment has been finalized and made.

  • Elements of a Receipt

A receipt often includes elements, such as the names of the vendor and customer, list of goods and/or services purchased, prices, taxes, discounts, credits, total amount of the purchase paid, mode of payment, the date the payment has been made, receipt number, and signature of the vendor.

  • Different Types of Receipts

The following are different types of receipts that are often issued to customers: official receipts, billing statement, delivery receipts, collection receipts, donation receipts, electronic receipts, money receipts, service receipts, sales receipt and bank statement.

  • Uses of a Receipt

Receipts serve as a proof that the customer is able to pay for the goods and/or services he or she has desired to purchase. Oftentimes, receipts are used by customers to return defective items. However, for entrepreneurs, receipts are important documents that are used for tax filing purposes.

  • How to Write a Receipt

  1. If you are going to write your receipt by hand, make sure to invest in a quality carbon copy. Since you will be keeping a copy of the receipt for your bookkeeping, you speed up the process because you do not have to write down to receipt during each transaction.
  2. Make sure to use a dark-inked pen when writing your receipt so that it will not fade and can be easily be read.
  3. To make the receipt official, you will need to use a printed company stamp or pre-printed receipts bearing the name of your company name.
  4. Write down all the necessary elements on the receipt.

Sample Receipt Templates that You Can Download

Business Donation Sample Receipt Free Download

business donation sample receipt free download page 001 788x1020

Home Based Sample Business Receipt Download

home based business receipt pdf download1 page 001 788x1020

Passenger Receipt PDF Template

passengers receipt page 001 788x1020

Printable Blank Receipt Form Download

free printable blank receipt form template page 001 788x1020

Final Thoughts

It is always for an entrepreneur to know the crucial difference between an invoice and a reciept and should not use both documents as replacement for each other. Although they may have some similarties, both receipt and invoice should be used for the purposes that are stated above.

Since we have now reached the end of this article, do not forget to check out our free Microsoft Word Receipt templates and Excel invoice templates. They are available for free download, highly editable, and easy to use.

You may also like


Read More Articles about

BusinessReceipt Templates