What is an invoice?
An invoice is a paper or digital document a business gives to a customer to bill for goods or services. It includes a description of the goods or services, forms of acceptable payment, a due date and other details.
What is a receipt?
A receipt is a paper or digital document a business provides to a customer who makes a purchase or payment. It includes the customer’s payment amount, the date they paid and any remaining balance.
Invoice vs receipt
The main difference between an invoice and a receipt is that the invoice is a request for payment, whereas the receipt acknowledges a payment.
An invoice:
Shows what a customer owes
Includes a due date
Improves accounting
A receipt:
Notes what a customer paid
Shows the payment date
Proves expenditures
Receipt FAQ
What types of receipts should I keep?
Keep receipts for business-related expenses like:
travel
protective equipment required for your job
petrol and maintenance for work-related use of your vehicle.
It’s also a good idea to keep receipts for any item you might need to return, as well as receipts for any item that a warranty covers. For your personal taxes, keep any receipts for deductible charitable donations.
How long should I keep receipts?
The ATO recommends keeping all receipts for 5 years, which is especially important if your receipts are for business-related expenses that you plan to claim on your taxes.
How do I organise receipts?
The easiest way to organise receipts is to use a receipt scanner that integrates with your cloud-based bookkeeping software. Look for a receipt scanning app, so you don’t have to buy additional hardware and can scan receipts with your phone.
Invoice FAQ
How do customers pay invoices?
Payment methods are the issuing party’s choice, but many businesses accept:
debit or credit cards
BPAY
digital wallets
cheque.
How do I keep track of outstanding invoices?
If you use invoicing software, it can automatically notify you when a customer pays an invoice. It can also alert you when an invoice is past due and send a payment reminder to your customer.
What should the due date be on invoices?
This is a matter of personal preference, and you can set the due date based on when you generated the invoice, or when the customer receives it. Due dates tend to be more generous for larger purchases — 60 or 90 days, for example.
What’s a pro forma invoice?
A pro forma invoice illustrates what the customer will be paying for, and an estimated cost. It’s useful when businesses can’t predict what the customer’s total cost will be, based on unknown elements.
For example, a contractor might create a pro forma invoice for a homeowner’s window replacement — the low estimate assumes nothing is structurally wrong with the home; the high estimate would be if the window framing has water damage and needs to be replaced.
Manage your invoices with MYOB
If you have a high volume of receipts and invoices that need management, MYOB has you covered.
MYOB’s enterprise resource planning system is built for the Australian and New Zealand mid-market, meaning you can access professional invoicing processing workflows, receipt capture and cashflow management.
Find out more. Contact an Enterprise solution specialist today.
Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.