Invoice or receipt: which document the situation calls for
Answer three questions and see which document to send, and what it must carry.
The difference is timing. An invoice is sent before payment and asks for it: it carries a due date, payment details and, when you are registered, the tax the customer owes you. A receipt is issued after payment and proves it happened: it shows the date and amount received and how it was paid, and it closes the transaction. Both can carry the same lines and the same tax, and for tax purposes the label matters less than the details on the page. A UK VAT-registered seller dealing with another VAT-registered business must issue a VAT invoice within 30 days of the supply, even if the customer paid on the spot, and HMRC adds that a customer using cash accounting can ask for a dated receipt for a cash payment. In Australia, a receipt titled "Tax invoice" with the ATO's seven details serves as both, and a customer can demand a tax invoice for any sale above $82.50. In Canada, the customer claiming input tax credits needs the same details whatever the document is called.
Which document should you send?
Send
Tax invoice
| Asks for payment | Yes |
| Due date on it | Yes |
| Tax shown separately | Yes |
Checked by Radif Partners · Editorial policy · Methodology
Side by side
| Invoice | Receipt | |
|---|---|---|
| Sent | Before payment | After payment |
| Purpose | Asks the customer to pay | Confirms the customer paid |
| Key dates | Issue date, supply date, due date | Date the payment was received |
| Payment details | Bank account, payment link, terms | How it was paid: card, cash, transfer |
| Balance shown | Amount due | Amount received, and any balance left |
| Tax line | Yes when registered | Yes when registered |
| Used by the customer for | Approving and scheduling payment, reclaiming tax | Proof of expense, warranty, reclaiming tax |
The two are not alternatives so much as two moments of the same sale. Many small businesses only ever produce one of them: a tradesperson who is paid on completion may issue a single document headed "Receipt", an online seller may email an invoice that is already marked paid. What counts for the tax authorities is whether the document, whatever its title, contains the details their rules list.
When the tax rules decide for you
United Kingdom
HMRC's record-keeping notice says that only VAT-registered businesses can issue VAT invoices, and that a registered business must issue one whenever it supplies standard or reduced rate goods or services to another VAT-registered person, normally within 30 days. Paying immediately does not remove that duty. A retailer selling to the public is different: it can assume no VAT invoice is required unless the customer asks, and for a supply of £250 or less including VAT a simplified invoice will do. HMRC also notes that a customer using cash accounting may need a receipt for a cash payment, and that if asked you must give one, dated, for the amount.
Canada
The Input Tax Credit Information Regulations do not care what the document is called. Their definition of supporting documentation includes an invoice, a receipt, a credit card receipt, a debit note and a written contract. What matters is the information, by amount: under $100, the supplier's name, the date and the total; from $100, also the registration number and the tax; from $500, also the buyer's name, the terms and a description. A receipt with all of that is as good as an invoice for the customer's claim.
Australia
The ATO requires a tax invoice for the customer to claim a GST credit, and it has a precise meaning: a document intended to be a tax invoice, with the seller's identity and ABN, the date, a description with quantity and price, the GST and the extent each sale is taxable. A shop receipt that carries the words "Tax invoice" and these details counts. That is why the generator titles a paid document from a GST-registered business "Tax invoice / Receipt". For sales of $82.50 or less including GST, the seller does not have to provide one even on request.
United States
There is no federal rule on either document. Receipts matter to buyers for expense records and returns; invoices matter for business-to-business credit. Where you collect sales tax, show it as its own line on both, so a customer who later claims an exemption or a refund can see what was charged.
What a good receipt shows
A receipt is short, but a few details make it useful months later: your business name and tax number, a receipt number of its own or the number of the invoice it settles, the date of payment, the method, what was bought, the amount received and the tax inside it. When a payment only covers part of an invoice, write the balance still due; when it settles a deposit, say so. Here is the tax inside one paid amount of $550 in the generator's four main cases:
| Paid, tax included | Tax inside | Price before tax |
|---|---|---|
| Australia, GST 10% | $50.00 | $500.00 |
| UK, VAT 20% | £91.66 | £458.33 |
| Ontario, HST 13% | $63.27 | $486.73 |
| Quebec, GST + QST | $71.64 | $478.36 |
The receipt template builds this layout directly, with "Received from" instead of "Bill to" and the amount paid in place of the amount due.
Credit notes, quotes and pro formas are neither
Three other documents get confused with these two. A quote or estimate states a price before anything is agreed, and asks for nothing. A pro forma invoice looks like an invoice but is a preview of one, used for advance payment or customs, and a customer cannot reclaim tax on it. A credit note cancels or reduces an invoice already issued; in Australia the GST version is called an adjustment note, in the US a credit memo. The quote template, the pro forma template and the credit note template each print the right title.
Details your invoice must show
Details to fill in
8
| 1 | A sequential number that identifies the invoice |
| 2 | Your business name, address and contact details |
| 3 | Customer name and address |
| 4 | A clear description of what you are charging for |
Full VAT invoice
When a payment arrives late instead, the documents change again: in the UK a reminder can add statutory interest, as set out in the late payment interest guide.