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What is an Invoice?

Published May 31, 2019

Business Invoice



In many languages, the word for ‘invoice’ is the same as the word for bill and receipt. You might ask yourself "Why are there different words in English for them? Is there really any difference between them? In which situations do we use each word?” We’re glad you asked.



What is a receipt?





This is the piece of paper a customer gets once they have paid. The primary purpose of a receipt is to provide proof that a contractual obligation regarding the exchange of goods or services for goods or services has been fulfilled.


As an example, you get a receipt from the bar and the credit card/utility company because (1) you have paid and (2) the contractual obligations (pay for the stuff I gave you) has been fulfilled.


Anyone needing proof of payment for one of your clients or customers can make a generic sales receipt and customize it to fit their business’ needs. Of course, if you’re giving someone a receipt, then you have already given them their bill.




What is a bill?





A bill is what a customer calls the piece of paper for the goods or services that they have received. Usually, payment is expected immediately when the bill is presented (though not always).


To use the examples from above, when you go out for drinks you ask for the bill. The reason for this is threefold: (1) you are the customer, (2) you haven’t paid yet, and (3) you are usually expected to pay immediately upon receiving the piece of paper.


For those looking for a free billing template, we have over 100 for you to choose from. But honestly, if you’re the one giving a bill, you’re actually invoicing.




What is an invoice?





This is where things get a “little” more technical. An invoice is a document that someone provides to a customer stating what some goods or services will cost to be paid in the future. This is where the technical part comes in; an invoice is (1) given by the person who provides the goods/services (2) on credit.


Continuing the examples, the supplier gives an invoice to the bar for their drinks because (1) they have already provided the drinks to the bar (2) but the bar only pays for the drinks at the end of the month.


Of course, colloquially, many of us use the word bill for both a bill and an invoice, like the languages I mentioned before. However, there is a technical difference that is important linguistically and legally.



If you’re looking for an invoice, bill, or receipt, then you’re in luck because you’ve come to their home. We’ve also got quotes, estimates, credit memos, credit notes, and purchase orders for you. I guess you could really call us a dormitory.



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