Invoice vs receipt: which one to send, and when

An invoice asks for payment; a receipt confirms it. You send an invoice before the money moves — it lists what's owed and by when. You give a receipt after the customer has paid — it records that the balance is settled. Same job details, opposite sides of the payment. If you remember one thing, remember the direction: invoice = "please pay," receipt = "you paid."

Below is what each document is for, what goes on it, and the situations where people mix them up.

What an invoice is for

An invoice is a formal request for payment. It itemizes the work or goods, shows the subtotal, tax, and total, and — critically — carries a due date. Until it's paid, an invoice represents money your business is owed (your "accounts receivable," in bookkeeper terms).

An invoice needs: your business details, the client's details, a unique invoice number, the issue date, the due date, itemized lines with quantities and prices, subtotal, any tax or discount as separate lines, and the total due with how to pay. Our step-by-step invoice guide covers each field, or you can just make one now and see the fields laid out for you.

What a receipt is for

A receipt is proof of payment. It shows what was paid for, when, and how much — and its balance due is zero. Customers need receipts to claim expenses, return goods, or keep their own books; you keep a copy as evidence of income.

A receipt needs: your business details, the payment date, what was bought or done, the amount paid, and ideally the payment method. It does not need a due date — the transaction is finished. You can make a clean receipt here, free, with no watermark.

The gray area: a paid invoice

Here's where the two meet: once an invoice is paid and marked as such, it effectively becomes a receipt. A "PAID" invoice with a zero balance due does the receipt's job, and many small businesses never issue a separate receipt at all — they just send back the invoice marked paid. That's fine. What matters is the customer holds a document showing the debt is settled.

If a customer specifically asks for "a receipt," don't overthink it: re-issue the same details titled Receipt with the paid amount shown. In the generator, that's the Type switcher in the toolbar — one click turns an invoice into a receipt with the same line items.

Which one should you send?

• Work is done (or agreed), payment hasn't happened yet → send an invoice with a due date.
• Customer just paid you — cash, card, transfer, app → give a receipt on the spot.
• Customer paid an invoice you sent earlier → mark it paid and send it back, or issue a receipt with the same details.
• Customer wants the price before the work → that's neither; send a quote or estimate first.

Do you legally need to issue receipts?

For most small service businesses in the US, there's no blanket federal law forcing you to hand out receipts — but sales-tax rules, card-processor agreements, and plain professionalism usually mean you should. Customers paying cash especially deserve one, since it's their only proof. Whatever you issue, keep your own copy; consistent paperwork is what saves you at tax time.