Invoices and receipts are issued by sellers and merchants and given to buyers, clients and customers. The difference between the invoice and receipt is that the invoice is issued by the seller to the buyer to made payment and the receipt is also issued by the seller to declare that the payment is done. The invoice contains the detail of the product and the name and address of the buyer and usually, the receipt contains the address of the company and details of the product and make it clear that the payment is done.
Invoices and receipts are used in accounting to record sales transactions and to account for requests and receipts for payment. In every business even in a small business payment transaction will be recorded or documented with an invoice and receipt.
|Definition||An invoice is a document issued by the sellers, vendors and merchants to request payment.||The receipt is a document issued by the seller and vendor after the final payment is done.|
|Record||To record the details of good which is sold out, but yet the payment is not done.||To record the evidence that the good is sold out and the payment is done.|
|Issue||The invoice is issued before the payment.||The receipt is issued after the payment.|
|Document type||It is the type of non-negotiable document.||It is also a type of non-negotiable document.|
|Details||The invoice contains the details of quantity, unit price, company’s name, address and number, discount, taxes and total due.||The receipt contains the quantity, taxes, unit price, discount, total amount payed and mode of payment and buyer’s name, number and address.|
What is an Invoice?
An invoice is a bill or commercial document issued by the seller to a buyer. The invoice establishes a good business relationship between the buyer and seller. It is a verified written agreement between the buyer and the seller of the goods or services. It is a non-negotiable commercial document. The invoice contains details regarding unit price, quantity, taxes, discount, date of issue of invoice, the payment which should be done in a given time and the signature of the seller. The instrument is delivered prior to the payment of the goods for indicating the amount due to the merchandise.
Many invoices give the buyer 30 days to pay the amount but some of them offer a discount that if you pay the amount within the days of the invoice date you will get 10% discount on total bill. So the date must be mention on the invoice.
What is a Receipt?
A receipt is a non-negotiable commercial document. It is used to make sure and stated that the value of goods and services have been received. It is issued by the vendor or seller to the buyer to act as payment has been made. The receipt contains the complete details about the buyer, sellers and payment method. Such as quantity, name, number and address of both the parties, unit price, total price, discounted price, date of payment, method of payment and the total amount paid. Signature of the seller is must and make it complete proof that the payment for some goods and services is done.
In some countries, it is obligatory for the seller to provide a receipt to the buyer confirming transaction details. In most cases, the recipient of the money provides the receipt. However, sometimes the buyer generates one, as occurs when the buyer returns a product and requests a refund.
Key Differences between Invoice and Receipt
- An Invoice is a request for payment and receipt is a confirmation of payment.
- The significant difference between the two is that the invoice is issued prior to the payment while the receipt is issued after the payment.
- The invoice is used to track the sale of goods or services. On the contrary, receipt acts as documentation for the buyer that the amount of the merchandise has been paid.
- The invoice indicates the total amount due whereas the receipt indicates the total sum paid along with the mode of payment.
- The invoice records complete knowledge about the buyer and seller. On the other hand, the receipt has also a complete knowledge but also have a method of payment in a record.
Sales invoice and official receipt both are a prominent part of the purchase cycle. The invoice helps the seller to keep the record of sale and to determine that amount of merchandise has been received or not. The buyer can also track and match the details of goods or services listed on the invoice are received. The receipt can help the customers to track payments for the stuff. It creates a strong business relationship between the buyer and the seller. Both have few similarities that both are the part of the purchase cycle, both contain the complete knowledge about buyer and seller. Sellers can also identify that amount on which invoices is received and which ones are still outstanding.