What is an invoice?

An invoice is a document a seller issues to a buyer that lists what was supplied, what it cost, and when payment is due. It is the record that turns finished work into an enforceable debt, and it is what your accountant and the tax office will ask for at year end.

An invoice is different from a receipt. The invoice asks for money; the receipt confirms money arrived. It is also different from an estimate or a quote, which describe work that has not happened yet and carry no obligation to pay.

How to create an invoice

The whole process takes about two minutes in the tool above.

1. Enter your business name, address and tax number so the client knows who to pay.
2. Add the customer's name, address and billing email.
3. Give the invoice a unique number and set the issue and due dates.
4. List each line of work with a description, quantity, unit price and tax rate.
5. Apply any discount, pick a currency, and choose a template.
6. Download the PDF and send it to your client.

What should an invoice include?

Most tax authorities expect the same core fields, whatever country you are in. Leaving one out is the most common reason an invoice gets bounced back by a client's accounts payable team.

• The word "Invoice" so it is not mistaken for a quote
• A unique, sequential invoice number
• Your business name, address and contact details
• Your tax registration number where you have one
• The customer's name and address
• The invoice date and the payment due date
• A line-by-line description of goods or services
• Quantity, unit price and line total for each item
• Subtotal, tax, any discount, and the amount due
• Payment terms and how to pay you

Invoice vs receipt

An invoice is a request for payment issued before money changes hands. A receipt is proof of payment issued after. If a client pays you on the spot, you can skip the invoice and issue a receipt instead — but if you want to be paid on terms, you need the invoice first.

Keep both. The invoice supports your revenue figure; the receipt closes the loop and settles disputes about whether an amount was paid.

Invoice vs estimate

An estimate is your best guess at the cost of work that has not started. It is not binding and it does not create a debt. A quote is a firmer version of the same thing — a fixed price, usually valid for a stated period.

The usual sequence is estimate or quote first, work second, invoice third, receipt last. Our estimate generator and quote generator produce documents that carry over cleanly into an invoice.