Receipt vs Invoice: Difference and How to Write a Payment Receipt
People often use "invoice" and "receipt" as if they were the same thing, but they do opposite jobs. An invoice asks for payment. A receipt proves payment has been received.
Key differences
| Invoice | Receipt | |
|---|---|---|
| When issued | Before or at the time of supply | After payment is received |
| Purpose | Request for payment and a tax document | Proof of payment |
| Shows | Items, tax, amount due | Amount paid, mode and date |
| Who keeps it | Both parties | The payer, as proof |
What a payment receipt should include
- Receipt number and date
- Your business name and address (and GSTIN if registered)
- Name of the person or company who paid
- Amount received in figures and in words
- Payment mode: cash, UPI, bank transfer, cheque (with number) or card
- What the payment is for, with the invoice number if any
- Balance due, if it is a part payment
- Signature and stamp if you use one
Advance payments
When you receive an advance, give a receipt and mention it clearly. For GST-registered businesses, an advance may have tax implications, especially for services, and may require a receipt voucher. Confirm with your CA how it applies to you. Then issue a tax invoice when you supply the goods or services and adjust the advance.
Cash receipts and legal limits
Keep a copy of every receipt. For cash payments, remember that tax rules restrict cash transactions above certain limits, so prefer bank or UPI transfers for large amounts.
Make a receipt in a minute
Use our free payment receipt generator to create a receipt with the amount in words and download it as PDF. For orders still to be billed, start with a quotation and see quotation vs invoice vs proforma.