What Is The Difference Between an Invoice and a Receipt?

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When it comes to handling all the accounting for your home or business so many words and phrases get used. This can make things slightly confusing when you are not familiar with all the jargon used.

A common question people have is what the difference is between an invoice and a receipt. They both contain a total amount of products or services so is important to keep both? If not which one should you keep and in what circumstances.

What is an Invoice?

The first step to learning the differences between invoices and receipts is to understand what an invoice is. In “plain talk” an invoice is a bill. It is a document, digital or physical, that itemizes the full amount you owe or someone owes you.

Invoices are important to keep for everyone that is involved in a transaction. It allows you to have itemized record of a sale or purchase. Many companies that send Invoices may not provide itemized receipts.

What is a Receipt?

While a receipt is similar to a receipt in the fact that it shows the total amount you owe, the major difference is that the receipt is proof that you paid the amount owed. An invoice only shows that you were charged that amount.

You should always keep receipts because they are proof of your purchase and show that you paid your debt. It is a good practice to store your receipts with the corresponding invoice so that you can easily compare them.

Just The Tip of the Iceberg

Handling accounting for a small business or even just your finances can be really overwhelming. Understanding invoice vs receipt is just the “tip of the iceberg” when it comes to the knowledge you will need to attain.

Thankfully some companies can handle all of these worries for you. They will categorize and file all your information so that you do not have to worry about making any mistakes. These companies can even help you set up all your billing to be digital.

Easy to Use

These online companies offer software that is very user-friendly and has staff that will walk you through the whole process. These companies can help you to deal with all your financial questions and situations.

The software will help you to keep organized digital records. It will also be able to help you to locate everything you need easily without digging through filing cabinets. This will make getting everything together to handle taxes much easier.

Easily Take Online Payments

These companies can also help you to set up options to let customers pay you online. Offer the option for digital payments can open up a whole new world of customers to your small business.

Everyone does everything from their phones now and you can find companies that will help you to be able to be on the cutting edge of payment technology. This will be key to attracting new customers.

Invoice VS Receipt and More

Now you should understand the difference between invoices and receipts and know why they are both important to hold on to. These 2 terms are just the start of all the accounting jargon you will need to learn to handle all the finances for your small business and your home if you do not choose to find a company to help you.

Remember, some companies offer options to help you pay your invoices online and to create invoices and receive payments online. These companies offer software that will help and keep everything digitally filed and organized. Using one of these customers will have you operating your finances as a professional before you know it.

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