They are often confused, but an invoice and a receipt serve fundamentally different purposes in your financial workflow.
Do I send an invoice or a receipt? This confusion is common, especially for new business owners. The difference is about timing and purpose.
The Key Difference: Timing and Purpose
| Document | Purpose | Timing |
|---|---|---|
| **Invoice** | A request for payment | Before payment is made |
| **Receipt** | Confirmation of payment | After payment is made |
When to Use an Invoice
Use an invoice every time you are formally **asking a client to send money** for goods or services rendered.
When to Use a Receipt
Use a receipt every time you are formally **confirming a client's money was received**. It’s your proof-of-payment for their records.
Self-Billing and Point-of-Sale
In retail or self-service models, the invoice and receipt might be one document, where the act of purchase *is* the payment (e.g., a supermarket bill). For B2B services, they must be separate.
Invoice ASAP ensures that once an invoice is marked 'Paid,' a professional payment receipt is automatically generated and sent to the client, fulfilling both documentation requirements.