Invoice vs Receipt: Difference between Invoice and Receipt
The business strategy of the world is changing gradually. Some new systems are invented, and some old systems are improved. Both are not succeeding equally. Yet every business person concerned is continuing to research the two things. Although the concept of Invoice vs Receipt is not new, receipt vs invoice plays a vital role in the business. So it’s so important to keep our eyes open on this issue. However, today we will discuss the similarity and differences between invoices and receipts with their basic concept, how to write, and their importance. Let’s start our today’s discussion on the topic.
What is the Invoice?
INVOICE is an English word (Mid-16th century). Right initially, the word appeared as an Old French word with the spelling ENVOYER (send), and then it changes to ENVOI. And finally, the word comes into late Middle English and becomes its current form. [Source: Wikitionary]
Definition of Invoice:
An invoice is a recorded document that the seller sends to the customer to request products and services. It is like a bill; it lists what services or goods are sold, how much they cost, and which payment method the seller accepts. The invoices are usually paid to a customer after receiving their service or product but before payment. For this reason, especially those who sell many products like manufacturers or wholesalers, among freelancers who provide services rather than goods, such as graphic designers or writers. However, whatever they sell, any business can use the invoices to pay the bills of customers after selling.
How to Write an Invoice?
Writing or designing an invoice is very easy and straightforward. But there are some specific important elements that you have to focus on. These elements have created the difference between invoice and receipt. Each invoice carries more transactional information than a receipt. Vital elements of the invoice have been included below. Such as:
- Business or company name, logo or monogram, and contact information;
- The name of the consumer and his/her contact information;
- A unique invoice ID or number;
- Invoice issue date;
- The date of paid or due;
- All acceptable payment methods;
- A detailed explanation of purchasing goods and services included rate and quantity;
- The total amount owed with currency, including any fees and taxes.
- The hint of purchasing terms and conditions, for example, warranty, guarantee, return, etc.
- A personalized note.
Because of invoice payment requests and transactional records, all this information must inform a customer about exactly what charges are being charged for them and what you expect for compensation.
Why are Invoices Important in Business?
In business, the invoice is the most important document. The primary objective of it is to keep a record of sales. By which vendor can track the date of selling, how much money was paid and debited. Finally, we can say that invoice is counted as legal proof of a financial transaction or request to get the payment.
What is the Receipt?
RECEIPT is a late Middle English word. At the very beginning, it appeared as a Latin word with the spelling RECIPERE. In Medieval Latin, the spelling is changed to RECEPTA (received), and in Anglo-Norman French, we see it as RECEIPT. And at the end of all, that is, late Middle English, the word takes its present form. [Source: Merriam Webster]
Definition of Receipt:
A receipt is proof of payment when requested for payment of the invoice. Such a document ensures that a seller sells products or services to his/her customer and how much cost has been paid from the customer instead of those products, services, or anything else. Although receipt providing is not legally essential in all businesses, it is typical behavior provided to the consumer after purchasing a service from the seller. However, receipts can be given to a customer physically or electronically. Almost 70% of American people like to get paper-based receipts.
How to Write a Receipt?
If you have coded a lack of knowledge of business-related studies, you will not determine the difference between invoice and receipt. There is too much dissimilarity in invoice vs receipt. However, see the following points which have included some elements of receipts. Such as:
- Your business, company, institution name, logo or monogram, full address, and contact information.
- A unique number for easily identified;
- Cleared date of purchasing or selling;
- Completed listing of products, services, or goods that is sold;
- Price of each product, goods, or service.
- Any offer, coupon, or discount.
- Included charging fees, taxes, or anything else sold;
- Calculated the total amount in available currency.
Why are Receipts Important in Business?
Receipts are significant for all types of businesses. Receipt ensures the transparency of the seller to the customer. Besides, a customer always expects his purchasing calculation. From this viewpoint, we can say that receipts play a vital role and essentially exist in business.
Invoice vs Receipt or Receipt vs Invoice:
Till now, we have discussed the concept of receipt and invoice. Now, we will see the difference between invoice and receipt. At first, here has included a chart or table which represents the invoice vs receipt. We have designed this chart of a table with three columns to better understand and learn quickly. However, let’s see the table or graph of receipt vs invoice. Such as:
|Origin of word||Latin||French|
|Meaning||An acknowledgment of having received||A time-stamped commercial document|
|Definition||A receipt is written documentation that a seller provides to customers after paying for sales.||An invoice is written documentation that a seller provides to customers before payment to request the payment.|
|Time of Issue||After payment||Before payment|
|Importance||Evidence of payment||Record of purchasing details|
|Presentation||Document of paid||Request for payment|
|Contents||Contains taxes||No taxes or GST clause|
|Receiver||Company or business||End-user|
|Condition||Both buyers and sellers should be registered dealers.||Only the seller should be registered.|
Key to Difference between Invoice and Receipt:
Invoice vs receipt or receipt vs invoice is the main topic of our today’s discussion. We already explained its basic or fundamental concept. And here is also shown an essential table of the chart. Now, we will discuss the keys to the difference between receipt and invoice. Such as:
- An invoice is a payment request. On the other hand, a receipt is a confirmation of payment.
- When an invoice is issued before payment, a receipt is issued after payment.
- The receipt prepares as triplicated, whereas the invoice prepares as duplicated.
- The receiver of the receipt may be a company, business, or institution. In contrast, the end-user is the receiver of the invoice.
- A receipt is one kind of evidence of payment; simultaneously, the invoice is a record of purchasing details.
- The invoice specifies the total amount due, and the receipt specifies the total amount paid.
- While an invoice is used to keep track of products, services, or goods sold, a receipt acknowledges that a payment has been made.
These are the keys to the difference between receipt and invoice. See their similarities between invoices and receipts in the next paragraph.
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Similarities between Receipt and Invoice:
After enough discussion of the difference between receipt and invoice, there are similarities of invoice vs receipt or receipt vs invoice. Such as:
- The seller’s issue is both.
- Both are legal and financial documents.
- Both carry the seller and consumer information.
- If the complete payment makes at once, the invoice and the receipt both list the total amount.
These are the keys to the similarity between invoice and receipt. For enriching the knowledge on a specific topic, similarities are essential in discussing the difference.
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Hire a Graphic Designer to Design a Receipt and Invoice Templates:
If you want to run a serious business or company, you have to prepare lovely invoice and receipt templates. And both templates must be beautiful and attractive. If you fail to do this, you will fail to make your customer interested even if you are a little bit. And it would help if you never wanted it. If you don’t want this, you’ll need to design excellent receipt and invoice templates. And you can get the help of a skilled graphic and branding designer. We will recommend you; hire Al-Imran Akanda, who is an experienced graphic designer. He has been helping us with different types of works most of the time, which are graphically related.
Hire Al-Imran Akanda
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Receipt vs invoice or invoice vs receipt is a significant thing in the business-related discussion. Invoice is given to customers before payment for the payment requests. And, receipt gives to the customer after payment as proof of payment. Both things happen when successful purchasing is done. Through these two steps, the customer and seller may be satisfied. Finally, we can say that the fundamental concept, importance, similarity, and difference between invoice and receipt are most important for customer and seller. However, we will come back with another essential discussion in the next discussion or article.
This is a great article. After reading this article, I’ve cleared about what is the invoice and what is the receipt. Besides, the importance of both things.