# What is the difference between a receipt and an invoice?
Receipts and invoices serve different purposes in business transactions: INVOICE - A request for payment issued before or at the time of sale, showing what is owed. Used to: request payment from customers, establish payment terms, record accounts receivable, track outstanding debts. Invoice timing: sent before payment is received. RECEIPT - Proof of payment issued after money is received, confirming the transaction is complete. Used to: acknowledge payment received, provide proof of purchase, record accounts receivable, close the transaction. Receipt timing: issued after payment is received. Key differences: (1) Purpose - invoice requests, receipt confirms; (2) Timing - invoice before payment, receipt after payment; (3) Accounting - invoice creates receivable, receipt reduces receivable; (4) Legal Status - invoice is payment demand, receipt is payment evidence. In practice: retail stores often issue receipts immediately (payment at point of sale), while B2B transactions typically involve invoices with payment terms (Net 30) followed by receipts after payment. Some businesses combine both on a single document for immediate payments, marking it "Invoice/Receipt" or "Paid Invoice".
## Key Takeaways
- Receipts and invoices serve different purposes in business transactions: INVOICE - A request for payment issued before or at the time of sale, showing what is owed.
- Used to: request payment from customers, establish payment terms, record accounts receivable, track outstanding debts.
- Invoice timing: sent before payment is received.
## Related Topics
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