Invoice vs Receipt

When to send an invoice

Send an invoice when work is complete or a milestone is due and you are requesting payment. It should show what was delivered, the amount due, payment terms, and how to pay.

• Issue after delivery or milestone
• Show amount due and due date
• Include payment instructions

When to send a receipt

Send a receipt after payment is received. It confirms the amount paid, payment date, method, and any remaining balance. Many freelancers send a receipt the same day funds clear.

• Issue after payment posts
• Show amount paid and payment date
• Note any remaining balance

What each document should include

Both documents should share core details: seller and buyer names, document number, line items, and currency. An invoice emphasizes amount due and due date. A receipt emphasizes amount paid and payment date.

• Shared: seller, buyer, line items, currency
• Invoice focus: balance due
• Receipt focus: payment confirmation

Example: from invoice to receipt

Suppose a designer finishes a $1,200 project on August 4. They issue invoice INV-1048 with Net 15 terms and a due date of August 19. The client pays by bank transfer on August 16, using INV-1048 as the reference.

After the deposit clears, the designer creates receipt RCPT-1048 showing the $1,200 payment, the August 16 payment date, the transfer method, and a zero remaining balance.

Keeping the original invoice number as a reference makes it easy for both sides to match the request, payment, and confirmation without treating the receipt as a second charge.

Partial payments, refunds, and corrections

A receipt should reflect what actually happened, not simply repeat the invoice total. If the client pays $800 toward a $1,200 invoice, show $800 received and $400 still due.

If money is later refunded, keep the original receipt and create a separate refund or credit record rather than silently editing the paid amount. For a typo discovered before payment, correct and resend the invoice with a clear note.

For a change after payment, preserve the transaction history so the client and your bookkeeper can follow each step.