Invoice vs receipt, what are the key differences between those two documents? When and how are they being used in the workplace?
Bills, receipts, and invoices are just a few of the accounting documents that your company may use on a monthly basis.
There are many other types of documents such as proforma invoices, credit notes, prepayment invoices, estimates bills, and other, however, we will focus on receipts and invoices in this post because many people are confused about the differences and which one to send out.
Invoice vs Receipt, How They Differ Based on The Definition
An Invoice is a document that details the specifics of a transaction involving two parties. They ensure that a monetary trade agreement is clear and that all relevant information is documented.
An invoice specifies what was exchanged, how much each item cost, and the total number of items transacted.
The final payable cost is calculated based on all of the other data and delivered to the person who will be paying the invoice.
A receipt is a written document that confirms the completion of a transaction between two parties. This happens in a variety of commercial situations, including business to consumer, business to company, and stock trading.
Receipts are used to document and detail the transfer of a valuable item or service to another entity.
This is to ensure that all parties are aware of what happened during the transaction, how much was paid if money was exchanged, and when it occurred.
Read Also: Invoice Number Explained: How to Assign It?
Invoice vs Receipt, How Are they Being Used?
Invoices are used to seek payment from buyers, maintain track of transactions, manage inventories, and make goods and services delivery easier.
Invoices are also used to track predicted future revenues and manage client relationships by providing convenient payment choices such as longer payment terms, discounts for early payment, and cash payment.
Buyers and customers utilize receipts to show they paid for an item, particularly in return circumstances where the goods are damaged or substandard.
So, after a service is performed and money is owing, you send an invoice, and then you send a receipt after you get payment from the invoice.
The Key Differences Between Invoice and Receipt
The major topic of our discussion today is invoice vs receipt. Its core or essential concept has already been explained.
Now we’ll summarize what are the key differences between an invoice vs a receipt:
- An invoice is a request for payment, a receipt, on the other hand, is a confirmation of payment.
- Invoice is sent out before it is paid, whereas a receipt is sent out after it is paid.
- In most cases, the receipt is prepared in three copies, whereas the invoice is prepared in two copies.
- A firm, business, or institution may be the recipient of the receipt. The end-user, on the other hand, is the one who receives the invoice.
- A receipt is one type of proof of payment, while an invoice is a record of the purchase details.
- The whole amount owed is specified on the invoice, and the total amount paid is indicated on the receipt.
- A receipt confirms that a payment has been made, whereas an invoice is intended to maintain track of products, services, or goods supplied.
Yes, They Do Have Some Similarities
After a thorough examination of the differences between receipt and invoice, there are some similarities between invoice vs receipt, for instance:
- Both are issued by the seller.
- The documents are both legal and used in financial activities.
- Both include information on the seller and the buyer.
- They both list the total amount if the entire payment is made at once.
Jurnal by Mekari, A Reliable Invoicing Software To Create Professional Invoices
If you ever wonder on how to make an invoice without hassle, you might want to consider an invoicing software such as Jurnal by Mekari.
Jurnal is one of the best accounting software that you can rely on to create professional-looking invoice templates!
With a simple and automated system, you can effortlessly create and send invoices. Customers will pay you faster if you employ ready-to-use online invoicing features, so try it now for free!
Based on the explanation above, we hope that you can understand more on the differences between invoice vs receipt.