Both invoice and receipt are non-negotiable commercial instruments, which are used during the course of a transaction. While an invoice is a document, made by the seller and issued to the buyer, so as to authorize the sale. It contains the details of the goods and contains the name and address of the parties to transaction, price, discount, date, and place of delivery.
In contrast, receipt, is a simple official acknowledgment, that the goods or services have been received. It is prepared by the vendor and given to the consumer and is used to show the ownership of the item. These terms are widely used in business parlance, as these are related to operational activities. Many do not understand the meaning and difference between invoice and receipt and end up juxtaposing the two. So, this article will clear all your doubts, take a read.
Content: Invoice Vs Receipt
|Basis for Comparison||Invoice||Receipt|
|Meaning||An invoice is a commercial document issued by the vendor to the purchaser to request payment||A receipt is a document issued by the vendor to the purchaser after the final payment is done.|
|Time of Issue||Before the payment.||After the payment.|
|Importance||To record the details of the merchandise sold, but the payment is yet due against it.||To act as an evidence that the payment for merchandise bought has been done.|
|Details||Quantity, unit price, invoice number, discount, taxes and total due.||Quantity, unit price, receipt number, discount, taxes, the total amount paid and mode of payment.|
Definition of Invoice
An invoice is an acknowledgement issued by the vendor to the purchaser of goods or services to request for the payment of goods sold or services rendered by him. It is a non-negotiable legal document which identifies the buyer and seller of the stuff. It contains details regarding quantity, price, discount, taxes, the total amount due for the payment, invoice number, date of issue of invoice and the seller’s signature. The instrument is delivered prior to the payment of the goods for indicating the amount due against the merchandise.
Definition of Receipt
A receipt is a commercial legal instrument used for stating that some goods or services of value have been received. It is issued by the vendor to the purchaser to act as proof that payment has been made. The receipt is issued after the payment of the stuff. The document contains details of buyer and commodity like quantity, price, taxes, discounts, mode and date of payment, the total amount paid, receipt number and signature of the seller or his authorised agent.
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.
- Both are commercial documents.
- Both are a part of the purchase cycle.
- Both contain details about buyer and seller.
- Both are legally non-negotiable instrument.
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 and sellers can also identify that amount on which invoices is received and which ones are still outstanding.