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As a new business owner, some administrative or industry terms might be foreign to you. Some of the new business owners we talk to asks us the difference between an invoice and a receipt; some even think that they are the same thing. Before we dive into the differences between these two documents, let’s define what each document means.
What is an invoice?
An invoice is a commercial document issued by a vendor as a form of billing for goods or services provided to their customer. The invoice should include the details of the transaction, such as vendor and customer information, the date, item or service description, quantity, unit price, invoice number, discount, taxes, and total amount due. Hence, vendors will issue this document before payment is made.
What is a receipt?
In contrast, a receipt is a document by the vendor as confirmation that payment is received. This document should include the same transaction details found on the invoice with the addition of receipt number, the amount paid, and mode of payment.
The difference between an invoice and a receipt
It is essential to remember that both documents are legal documents issued by the vendor, and that it should include the information of the vendor and the customer.
Below is the summary of the differences:
- Definition: A commercial document that vendors issue to the customer for billing purposes
- Timing of Issue: Before a payment
- Purpose: Keep a record of the transaction and present the total amount due for payment
- Document Details: Contact information of all parties, date, item or service description, quantity, unit price, invoice number, discounts, taxes, and total due
- Definition: A commercial document that vendors issue to the customer as proof of payment received
- Timing of Issue: After a payment
- Purpose: Keeps a record and proof of payment received against a transaction or invoice
- Document Details: Contact information of all parties, date, quantity, unit price, receipt number, discount, taxes, the total amount paid, and mode of payment
Creating Invoices and Receiving Payments with Enterpryze
The days of handwritten booklets and troublesome excel invoices are long over. With Enterpryze you can create invoices in seconds from your computer or smartphone. Additionally, you can collect payment via cash, cheque, credit card, or PayNow and generate the receipt instantaneously.
Our document gallery houses over 80+ templates for you to choose from! This offers you a broad selection of documents that match your business needs while staying compliant with government regulations.
Enterpryze helps you to create all your business transactions such as quotes, orders, deliveries, invoices, receipts, returns, and credit notes for both your sales and purchases.
For more information, talk to us or request a demo today!