Blog · · 4 min read
Invoice vs Receipt: What Is the Difference?
The two documents are constantly confused, and the confusion causes real accounting problems. The distinction is simple: one asks, the other confirms.
The invoice asks for money
An invoice is issued before payment. It creates a receivable in your books and a payable in the client's. Its job is to establish what is owed, by whom, and by when.
The receipt confirms money arrived
A receipt is issued after payment. It creates nothing; it closes something. Its job is proof — for the buyer claiming an expense, and for you settling any later dispute about whether an amount was paid.
When you need both
Any time a client pays on terms. The invoice starts the clock, the receipt stops it, and matching the two is how reconciliation works. When a client pays immediately — retail, a deposit taken on the spot — the receipt alone is enough.
Common mistakes
Two errors account for most of the trouble: writing "paid" on an invoice and treating it as a receipt, which leaves no independent record of the payment date; and issuing a receipt with no reference to the original invoice, which makes reconciliation guesswork six months later.
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