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Difference between Invoice and Receipt

Difference between Invoice and Receipt

The two concepts refer to a document that aims to inform us about the cost of a good or service. Therefore, it is the suppliers of goods and services that provide us with these documents. The main differences between invoice and receipt are in the moment in which the supplier gives them to the consumer and in its finality; the invoice is taxable, but the receipt is not.  To understand it better we are going to see them separately.

Invoice vs Receipt

We will be provided a receipt always after making a purchase, as proof of payment made. In this document, you can see a series of data such as the price of the good or service, the date and description of the product we have purchased, taxes and shipping costs, if applicable. It is a proof of that purchase.

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On the other hand, the invoice is a somewhat more complex document because it has a tax purpose, not just information. Its function is to justify commercial operation has done that, then pay taxes, serves as proof of payment of taxes. Unlike the receipt, it is normally issued before making the payment. In an invoice, we can find data such as invoice number, date, supplier information, etc.

You can use the invoices to track payments, and the receipts to record the payments, as explained, the receipt is issued after payment and the invoice before.

Usually, a receipt does not include a breakdown of the taxes of each product, however, the invoice details the type of tax for each product purchased.

Example to differentiate between invoice and receipt

If we are going to buy at the supermarket, when paying our products, the cashier will give us proof of purchase, which we have called receipt. However, if we make a home renovation, before paying, the masons will provide us with an invoice to inform us of the price of the service. After these transactions, only the masons, having issued an invoice can justify that they have collected those taxes, the receipt, instead is rather informative, that could serve to return in a product.

About the author

Salman Qureshi

Salman Qureshi is an Accountant by profession & he loves to write on Commerce & Management Sciences Subject to assist Students. Hope you guys will like his effort.

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