Invoice vs. Receipt: What's the Difference?
The Short Answer
An invoice is a request for payment — sent before money changes hands. A receipt is proof of payment — issued after money is received. They bookend the same transaction.
Key Differences
| Invoice | Receipt | |
|---|---|---|
| Purpose | Request payment | Confirm payment received |
| Timing | Before payment | After payment |
| Direction | Seller → buyer | Seller → buyer (as proof) |
| Must include | Due date, payment terms | Payment date, method, amount paid |
| Legal role | Creates a payable obligation | Evidence the obligation was settled |
When to Use Each
Send an invoice when you bill clients for work, especially freelancers, agencies, and B2B sellers offering payment terms. Issue a receipt whenever a customer pays you — for cash sales, paid invoices, and deposits. Many businesses send a "paid" stamped copy of the original invoice as the receipt.
Can One Document Serve as Both?
Yes, with clear labeling. An invoice marked "PAID" with the payment date and method added functions as a receipt. Our invoice generator lets you add payment notes for exactly this purpose.
Tax Implications
Tax authorities generally require you to keep both: invoices prove what you billed, receipts prove what you received. Keep both for at least 6 years (check your jurisdiction's exact requirement).