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.

An invoice records the request and does not, by itself, confirm that payment was received.

• 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. A receipt documents the payment rather than asking the client to pay a second time.

Many freelancers send one after 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.