Invoices are typically issued to a customer after they have received their goods or services, but before payment has been received. Similar to a bill, it lists what goods or services were provided, how much they cost, and which forms of payment the seller accepts. To keep your business running as smoothly, it’s important to know how these two documents differ, what information to include in each one, and when it’s better to issue a receipt or an invoice to your customers.Īn invoice is a document, sent by the seller to the customer, that requests payment for products or services. Although these two documents have similar functions, they are incredibly different from each other. Most companies use a combination of receipts and invoices to record transactions for themselves and their customers, and it’s likely that you’ll have to do the same. It’s equally important for your customers to have documentation of the transaction, for their own financial records, and in the event that they have an issue with their order.Īs a business owner, you need to determine what the best record-keeping method is for your organization. Without a record of purchases, returns, or exchanges, it’s impossible to keep your finances in order, take care of your business’s taxes, or monitor your company’s performance. Documenting every transaction is crucial for small business owners and entrepreneurs.
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