Receipt or invoice: what’s the difference?

What is an invoice?

An invoice is a bill. You send it when the work is done, or when a deposit is due, to say what the customer owes and by when. Until it’s paid, it’s money you’re waiting on.

What is a receipt?

A receipt is proof of payment. It says the money arrived: how much, on what date, and how they paid. Your customer keeps it as proof they paid you, and you keep the receipts from your own suppliers as proof of what you spent.

When do I send an invoice, and when a receipt?

• Paid on the spot, at the counter or at the door: a receipt only. There’s nothing left to bill.
• Job first, payment later: an invoice when the job is done, then a receipt when they pay it.
• A deposit up front: a receipt for the deposit, then a final invoice that takes the deposit off the total, then a receipt for the rest.
• Paid in parts: a receipt for each payment, with what’s still owed on it.

What should an invoice include?

• Your business: name, phone, email and address.
• The customer, and the job address if it’s different.
• An invoice number and the date, so you can both find it later.
• What you did, line by line, with a price on each.
• Sales tax on its own line, where it applies in your state.
• Any deposit already paid, taken off.
• The amount due and the due date, big and clear.
• How to pay, ideally a link they can tap to pay by card.

What should a receipt include?

• Your business name and how to reach you.
• The amount paid and the date.
• How they paid: card, cash, check or bank transfer.
• What it was for, or the invoice number it pays.
• What’s still owed, if anything.

A short one is fine. Here’s an example for a made-up painting business: “Summit Painting got your payment of $1,330 by card on October 28, 2026, for invoice #1042. Nothing left to pay. Thank you.”

Can an invoice also be a receipt?

Yes, once it’s paid. An invoice marked Paid, with the date and how they paid, does the same job as a receipt for most customers. Just don’t send an invoice that still says “due” as if it were a receipt. That’s how people end up paying twice, or thinking they owe you when they don’t.

Which ones do I need to keep for taxes?

Both. The IRS lists invoices, receipt books and deposit records as proof of the money coming in, and receipts, invoices and card statements as proof of what you bought and spent (IRS, October 28, 2026). Those supply-house receipts are what back up your costs, so don’t let them fade on the dashboard.

The IRS’s general rule is to keep records for 3 years from when you file, and longer in some cases: 4 years for payroll tax records, and 6 or 7 years in a few others. A photo or a digital copy you can read is easier to keep than a shoebox. This is a plain-English guide, not tax advice, so check with your accountant.

How do I stop doing this by hand?

Typing invoices, chasing payments and writing receipts gets old fast. An app that sends the invoice from your phone, takes the card payment and sends the receipt by itself saves you from all three.

ohelloo Work does that. Invoices are paid by card into your own Stripe account, and the receipt goes out by text the moment they pay. Your crew can snap a photo of a supply-house receipt and add it to the job, and Numbers takes parts, receipts and pay off what you invoiced, so you see what each job made. It’s free to start for you and one helper, with 5% + 25¢ added to each payment made online. Get booked, $79 a month, covers your whole team with no ohelloo fee, plus your website and Google listing. We set it up for you, and your first 14 days of a paid plan are free.