The paper trail in order
- Quote or estimate – the price you offer before work begins.
- Purchase order – the buyer’s confirmation that they will pay that price.
- Pro-forma invoice – an optional advance bill for deposits, prepayment or customs.
- Invoice – the request for payment after supply.
- Receipt – proof that payment was made.
- Credit note – a document that reduces or cancels an invoice.
Side by side
| Document | Who issues it | Legally binding? | Used for tax? |
|---|---|---|---|
| Quote | Seller | Often an offer, depending on wording and local law | No |
| Purchase order | Buyer | Usually forms or confirms a contract | No, but referenced on invoices |
| Pro-forma invoice | Seller | No, it is a preview | Generally not a tax invoice |
| Invoice | Seller | A demand for payment under an agreement | Yes, when it meets tax rules |
| Receipt | Seller | Evidence of payment | Yes, as a record |
| Credit note | Seller | Adjusts an earlier invoice | Yes, adjusts tax |
When to send a quote
Send a quote when the customer asks “how much?” and the price is not obvious. A good quote lists the scope, the price, how long the price is valid, the deposit and the next step. Use the quote generator to include an expiry date and an acceptance signature line.
When to send an invoice
Send an invoice when you have delivered, or reached a milestone you agreed. It is the document your accountant and the tax authority care most about. See what to include on an invoice.
When to send a receipt
Send a receipt when money has actually arrived, especially for cash, card or part-payments. A receipt says “paid”, so only issue one for a payment you really received. The receipt generator is designed for genuine payments only.
Many businesses mark the original invoice “PAID” and use that as the receipt. That is acceptable in many places, but if a customer asks for a separate receipt, give one.
Common confusions
- “Is a quote an invoice?” No. A quote does not create a tax liability or a debt.
- “Can I use a pro-forma as a tax invoice?” Usually not. See pro-forma vs tax invoice.
- “Do I need a receipt if I send an invoice?” Not always, but customers paying in cash or by card at a visit often expect one.
- “What if I overcharged?” Issue a credit note.
Frequently asked questions
Can I turn a quote into an invoice?
Yes. When the customer accepts, copy the lines into an invoice, add the invoice number, date and payment details, and keep the quote reference for traceability.
Do I need a receipt and an invoice?
Not necessarily. A paid invoice can serve as a receipt. Separate receipts are useful for part-payments or when payment is made at the point of sale.
Is an estimate the same as a quote?
An estimate is usually a rough price that may change. A quote is a firm price. Say clearly which one you are giving.
Which document do tax authorities want?
They care about invoices, credit notes and proof of payment as records. Keep them for the period your country requires. See how long to keep invoices.
What is a statement?
A statement summarises all invoices and payments for a customer over a period. It is a reminder, not a replacement for invoices.
Related topics
- invoice vs receipt
- quote vs invoice
- estimate vs quote
- purchase order vs invoice
- proforma vs invoice
- business documents
- paperwork for freelancers