Invoices vs receipts

Editorial Team

9 min read
Restaurant manager holding receipts

It’s no secret that financial documentation can play an important role in the smooth functioning and success of many businesses. Two essential documents in this regard include invoices and receipts. While they may seem similar, they serve distinct purposes and hold different significance in various aspects of business operations and accounting.

From their key differences and writing processes, to delivery methods and what information to include, this article explores the distinction between invoices vs receipts and highlights their importance in terms of record-keeping, compliance, and customer trust.

What are invoices?

To put it simply, invoices act as a formal request for payment for goods or services provided by a business. The invoice itself is a document issued by a seller to a buyer, itemizing the goods or services provided and the corresponding amount owed. Though an invoice’s primary purpose is to request payment for a transaction, it also serves as a legal and financial record that creates a paper trail of business transactions.

Invoices are typically created using POS systems, invoice templates, or invoicing software, which can facilitate efficient and accurate invoice generation. By utilizing these tools, businesses can streamline the invoicing process and help ensure consistency in formatting and the information they include when requesting payment. 

What to include in an invoice

From freelancers and service providers to wholesalers and manufacturers, invoices are prevalent across many industries and all require standardization to ensure consistency. When writing an invoice, it is important to include all relevant details to provide clarity and avoid potential legal disputes. Additionally, some businesses may choose to include their bank account details to facilitate direct payments.

Invoices should include the following:

  • Logo and branding
  • Invoice number or ID numbers
  • Invoice date and payment due date
  • Seller and buyer contact information
  • Itemized list of products or services provided
  • Date and time for which products or services were provided
  • Quantity of each product or service provided with pricing 
  • Applicable taxes, rebates, discounts, and shipping costs
  • Payment terms and conditions that may apply
  • Which payment methods are accepted
  • Total amount due

How to send an invoice

Delivery methods for invoices vary depending on the preferences of the business and its clients. Traditional methods include mailing the invoice in hard copy format or sending it via fax. However, with advancements in technology, many businesses now opt for digital delivery methods such as email, online invoicing platforms, or integrating invoicing systems with customer relationship management (CRM) software. Digital delivery not only saves time and resources but also allows for faster processing and record-keeping.

How to handle unpaid invoices

One of the challenges businesses face is mitigating unpaid invoices or partial payments. Late payments or non-payment can negatively impact a company’s cash flow and overall financial stability. Mediation techniques play a vital role in resolving such issues and ensuring that businesses receive the payment they are owed in a timely manner. 


Effective communication is crucial when handling unpaid invoices. It is important to establish clear payment terms and expectations from the outset. In case of late payments, sending reminders is a common practice. These reminders can be automated through invoicing software, helping to ensure that clients receive timely notifications. It may also be beneficial to implement late payment penalties to incentivize on-time payments.


In some cases, businesses may encounter clients who are unable or unwilling to pay the full invoice amount. This can be particularly challenging for small business owners. In such situations, offering flexible payment plans or negotiating a settlement can help recover at least a portion of the outstanding balance. Maintaining good relationships with clients is important, but it is also crucial to protect the financial interests of the business.


Utilizing digital invoicing platforms or accounting software can aid in tracking invoice payment status and automate invoicing reminders. These tools can generate reports on outstanding payments, allowing businesses to take proactive measures to resolve unpaid invoices promptly. Document all communication and steps taken to resolve unpaid invoices for future reference. 

What are receipts?

Receipts are proof of payment given to customers after a business transaction is completed. They serve as evidence of the purchase and contain important information such as the date of the transaction, payment method, items purchased, prices, and any applicable taxes. Payment receipts are commonly provided in various formats, including paper receipts, digital receipts, or QR codes. 

What to include in a receipt

Writing a receipt involves capturing accurate information about the transaction. Noting that in cases where multiple payment methods are accepted, it is essential to indicate the specific payment method used for the transaction.

Receipts should include the following:

  • Logo and branding
  • Receipt number or ID
  • Date and time of the purchase
  • Seller’s contact information
  • Detailed description of the products or services purchased
  • Quantity, price per unit, any applicable taxes, or discounts
  • Total amount paid and payment methods utilized 

Types of receipts

Each type of receipt has its advantages and considerations. Handwritten receipts are suitable for situations where electronic systems are not available, while digital receipts and QR codes offer convenience and easy storage–reducing paper waste and providing quick access to transaction information. Businesses should choose the receipt type that aligns with their operations, customer preferences, and sustainability goals.

Handwritten receipts

Handwritten receipts have been a traditional method of providing proof of payment. They are typically written on a physical paper document and involve manually recording the transaction details. Handwritten receipts can be useful in situations where electronic systems are not available, but do not offer the same benefits as digital receipts. 

Digital receipts

Digital receipts, also known as electronic receipts or e-receipts, have gained popularity in recent years. They are sent and received electronically, typically through email or text messages, providing a convenient and eco-friendly alternative to paper receipts. Digital receipts can be automatically generated by POS (point of sale) systems or invoicing software. 

QR codes

QR code receipts are an innovative and efficient method of providing transaction records. They utilize Quick Response (QR) codes, which can be scanned using a smartphone or other QR code readers. The QR code contains all the necessary transaction information, making it easy for customers to store and access their receipts digitally. 

Difference between invoice and sales receipt

Although invoices and receipts share some similarities, they differ in purpose, timing, and in the information they contain. Invoices are issued before payment is made, requesting to collect payment from the buyer. They serve as a formal agreement outlining the goods or services provided, the amount owed, and the payment terms.

In contrast, receipts are issued after payment is made and provide proof that the transaction has been completed. They contain details of the payment made, including the date, payment method, and items purchased.

The key differences between invoices and receipts include:


Invoices serve as requests for payment, while receipts provide proof of payment. 


Invoices are issued before payment, while receipts are issued after payment. 

Information included

Invoices include details such as the invoice number, itemized list of products or services, and the total amount due. Receipts include information about the date of the transaction, payment method, items purchased, price, and any applicable taxes. 

Legal and financial implications

Invoices have legal implications, as they establish an agreement between the buyer and the seller regarding the payment terms and conditions. Receipts serve as proof of payment, which is important for record-keeping and potential disputes. 

Importance of receipts and invoices for businesses

Receipts and invoices play important roles in the day-to-day operations of businesses. They help enable efficient record-keeping, aid in tax compliance and filing tax returns, provide evidence for business transactions, and facilitate cash flow management. 

Record-keeping and financial management

Receipts and invoices are essential for more accurate record-keeping and reporting. They can provide a clear overview of all business transactions, making it easier to track sales, expenses, and profits. 

Tax compliance and filing

Invoices and receipts are key components in meeting tax obligations. Invoices help businesses report their income, while receipts provide documentation for deducting expenses. Proper record-keeping and organization of invoices and receipts help simplify the tax filing process and ensure compliance with tax reporting regulations. 

Building customer trust

Providing detailed and accurate invoices and receipts can help build trust with customers. These documents offer transparency in the pricing, terms, and conditions of the transaction. In case of any issues or disputes, well-maintained records can serve as evidence and contribute to resolving conflicts. 

Returns and exchanges

Receipts are essential for customers who wish to return or exchange products. They provide proof of purchase and help businesses ensure that the return or exchange process is smooth and efficient. Accurate information on receipts also supports proper inventory management and helps businesses track product returns. 

Cash flow management

Invoices play a crucial role in managing cash flow. Timely and accurate invoicing can help ensure that businesses receive payment on time, reducing the risk of cash flow issues. By tracking outstanding invoices and actively following up on unpaid invoices, businesses can maintain a healthy cash flow and address any potential issues promptly. 

Start using invoices and receipts in your business

Getting started with leveraging invoices and receipts in your business begins with choosing the right POS system.

From creating and sending invoices to printing and managing receipts, leveraging a POS system–like Clover’s–can help create the foundation on which your business’ operational efficiency and financial success will stem from, including:

By investing in an advanced POS system, your business can optimize its financial documentation, streamline operations, and support long-term growth.

Why wait? Elevate your business and get started with the Clover POS system today.


This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.

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