# Invoice vs Receipt vs Quote: Every Sales Document Explained

A quote offers a price, an invoice asks for payment and a receipt proves payment was made. Here is where pro forma and tax invoices, purchase orders, credit and debit notes, bills and statements fit, with one job traced through every document.

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- **Canonical URL:** https://dothecalculation.com/blog/business/invoice-vs-receipt-vs-quote
- **Category:** Business
- **Author:** Do The Calculation Team
- **Published:** 2026-09-21
- **Reading time:** 21 min read
- **Publisher:** Do The Calculation (https://dothecalculation.com)
- **Methodology:** https://dothecalculation.com/methodology

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## Invoice vs receipt vs quote: the short answer

A quote is an offer: it tells the customer what a job will cost before they agree to it. An invoice is a request for payment: it is issued after (or as) goods or services are supplied and says how much is owed and by when. A receipt is proof of payment: it confirms money has already changed hands.

Most confusion comes from the documents in between. A pro forma invoice looks like an invoice but is really a priced offer. A tax invoice is an ordinary invoice that meets extra rules so the buyer can reclaim tax. A credit note is a negative invoice. A bill is usually just an invoice seen from the customer’s side. Using the wrong one can cost your customer a tax reclaim or leave your records out of step.

Tool: [Make an invoice, tax invoice or pro forma](https://dothecalculation.com/tools/invoice-generator) — Pick the document title, add your lines and tax, and download a PDF. Free, no sign-up, and your data stays in your browser.

## Every sales document in one table

The table below lines up the twelve documents people most often mix up. The columns that matter are who issues it, whether it asks for money, and whether a tax authority treats it as evidence for a tax charge. “Tax document” here means a document that can support a VAT or GST reclaim or adjustment where those taxes apply.

**What each document does (general position; local rules vary)**
| Document | Issued by | When | Requests payment? | Tax document? | Binding? |
| --- | --- | --- | --- | --- | --- |
| Estimate | Seller | Before the work, price uncertain | No | No | An approximation, not a fixed price |
| Quote (quotation) | Seller | Before the work, defined scope | No | No | A firm offer; binds once accepted |
| Purchase order (PO) | Buyer | When the buyer commits to buy | No | No | Forms or confirms the contract, depending on terms |
| Pro forma invoice | Seller | Before supply | Invites payment | No | An offer, not a record of a sale |
| Invoice | Seller | On or after supply | Yes | Only if it meets tax rules | Records a debt that is owed |
| Tax / VAT invoice | Registered seller | On or after supply, within time limits | Yes | Yes | Records the debt and the tax |
| Commercial invoice | Exporter | When goods cross a border | Yes, usually | Used for customs | Records the sale for customs |
| Receipt | Seller | After payment | No | Supports the buyer’s records | Evidence that a debt was paid |
| Credit note | Seller | After an invoice, to reduce it | No, it reduces what is owed | Yes, if it meets tax rules | Adjusts a previous invoice down |
| Debit note | Seller (sometimes buyer) | After an invoice, to increase it | Yes, the increase | Yes, if it meets tax rules | Adjusts a previous invoice up |
| Bill | Seller (the buyer calls it a bill) | On or after supply | Yes | Depends on content | Same as an invoice |
| Statement of account | Seller | Periodically, e.g. monthly | Summarises what is still owed | No | A summary, not a new charge |

The pattern to remember: only invoices (in their various forms) and debit notes create an amount owed. Everything else proposes a price, commits to one, proves a payment, or reduces or summarises what an invoice already said.

_[Figure: The life of a sale, document by document — The order documents usually appear in a business-to-business job. Smaller jobs often skip the purchase order and the pro forma.]_

## Estimate vs quote: which one binds you?

In everyday business language, an estimate is an informed guess and a quote is a fixed price. A decorator who has not yet seen behind the wallpaper gives an estimate; once the scope is clear, they can quote. Only quote when you are confident about the scope.

The label alone does not settle the legal position. What matters is what you said and wrote, and what the customer relied on. In the UK, for example, the Consumer Rights Act 2015 says that anything a trader says or writes to a consumer about a service becomes a term of the contract if the consumer takes it into account when deciding to go ahead (https://www.legislation.gov.uk/ukpga/2015/15/section/50). Calling a firm-looking figure an “estimate” is not a reliable escape route.

Where no price is fixed at all, the same Act says the consumer pays a reasonable price “and no more” (https://www.legislation.gov.uk/ukpga/2015/15/section/51). Business contracts and other countries follow their own rules, so treat this as one example, not a universal rule.

**Estimate or quote: a practical way to choose**
| Situation | Better choice | Why |
| --- | --- | --- |
| Scope is fully defined (e.g. supply 40 chairs) | Quote | You can price it exactly, and the customer can budget around it |
| Hidden conditions (old wiring, unknown damp) | Estimate with a stated range | The final price depends on what you find |
| Time-and-materials work | Estimate with an hourly rate | The customer agrees the rate, not the total |
| Price depends on a supplier’s price | Quote with a short validity date | Protects you if costs move |
| Customer needs a figure for budget approval | Quote, or estimate with a cap | A cap gives them a ceiling to approve |

Pricing the quote itself is its own job. If you build a price from cost plus overhead and margin, the [markup and overhead quoting guide](/blog/business/markup-overhead-sales-tax-quote-guide) and the [markup calculator](/calculators/markup-calculator) walk through the arithmetic.

## Quote vs invoice, and where the purchase order fits

A quote comes before the customer says yes; an invoice comes after you have delivered (or at an agreed billing point). The quote says “this is what it will cost if you go ahead”. The invoice says “this is what you owe, and here is when it is due”. A quote has a validity date; an invoice has a due date.

The figures often match, but they do not have to. When extra work is agreed or items are dropped, the invoice shows the actual supply, and a note such as “Quote Q-0112 plus 2 hours additional labour agreed on site” saves an awkward phone call.

### Purchase order vs invoice

A purchase order is the buyer’s document. Larger organisations raise one to authorise spending before anything is ordered, and their accounts team then matches your invoice against it. If the PO number is missing from your invoice, or your quantities and prices do not match the PO, the invoice is often held until someone sorts it out.

So copy the PO number onto the invoice exactly as written, and invoice against the PO lines; if the job changed, ask for an amended PO before you invoice. Whether a PO accepts your quote or makes a counter-offer on its own printed terms depends on the wording and local contract law, so read those terms before you accept one. Where the reference goes on the page is covered in the [step-by-step invoice guide](/blog/business/how-to-write-an-invoice).

## Invoice vs receipt: a request versus proof

An invoice says money is owed. A receipt says money has been paid. They can list the same items and total, but they record opposite states of the debt.

Timing tells them apart. In a shop, the customer pays at the till and gets a receipt; there is no period of credit, so no invoice. In business-to-business work, the invoice comes first with payment terms, and the receipt (if any) later. For how long a customer should get to pay, see the guide to [invoice payment terms](/blog/business/invoice-payment-terms-explained).

**Invoice vs receipt**
|  | Invoice | Receipt |
| --- | --- | --- |
| Says | You owe this amount | You paid this amount |
| Issued | On or after supply, before payment | After payment |
| Has a due date | Yes | No; it has a payment date |
| Shows payment method | Payment instructions (how to pay) | How it was actually paid (card, transfer, cash) |
| Balance shown | Amount due | Zero, or what remains after a part payment |
| Seller’s records | Creates a receivable | Clears the receivable |

Both matter for record keeping. The IRS, for example, lists invoices, receipt books and credit card receipts among the supporting documents that back up a business’s books and tax return (https://www.irs.gov/businesses/small-businesses-self-employed/what-kind-of-records-should-i-keep).

A till receipt showing only a total may prove payment without meeting the rules for a VAT or GST invoice, so a registered customer who wants to reclaim tax may need the fuller document. Part payments sit between the two. If a customer pays £500 of a £1,200 invoice, a receipt for £500 is correct and the invoice still shows £700 due. A single document marked “Paid” only makes sense once the whole balance has cleared.

## What is a pro forma invoice?

A pro forma invoice is a preliminary invoice sent before anything is supplied, laid out like an invoice so the customer can pay up front, arrange finance or get internal approval. HMRC’s definition describes pro forma invoices as documents that contain some or all of the information on an invoice “but which do not fulfil that primary function” (https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec9010).

The point people miss is the tax position. In the UK, HMRC’s VAT guide says pro forma invoices cannot be used as evidence to reclaim input tax, even if they show every detail a VAT invoice needs, and that they should be clearly marked “this is not a VAT invoice”. If you then supply the goods or services, or receive payment, you must issue a proper VAT invoice (https://www.gov.uk/guidance/vat-guide-notice-700). HMRC’s manual adds that this full VAT invoice is due within 30 days (https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec9020).

- Title it “Proforma Invoice” and add “This is not a VAT invoice” (or “not a tax invoice”) where VAT or GST applies.
- Number it in its own series, such as PF-0031, never from your invoice sequence.
- Keep it out of your sales ledger: HMRC’s manual says a pro forma normally “has no place in the books of account”.
- When the customer pays or you deliver, issue the real invoice and quote the pro forma reference on it.

Pro formas are also common in exporting; UK export guidance lists one among the related documents a commercial invoice can refer to (https://www.business.gov.uk/export-from-uk/learn/categories/funding-financing-and-getting-paid/get-paid/how-create-export-invoice/).

> **Pro forma or deposit invoice?** — If a customer pays a deposit against a pro forma, HMRC says most deposits are advance payments that create a tax point when received, while a refundable security deposit (for example against damage to hired goods) does not (https://www.gov.uk/guidance/vat-guide-notice-700). So once a deposit arrives, a VAT invoice for it follows, as the worked example shows.

## Tax invoice vs invoice

Every tax invoice is an invoice, but not every invoice is a tax invoice. A tax invoice (called a VAT invoice in the UK and EU, and a tax invoice in Australia) carries the extra details a registered buyer needs to reclaim the tax they paid. A plain invoice from a business that is not registered, or for a supply that is not taxed, simply requests payment.

The difference matters most to the buyer. In the UK, HMRC says customers need VAT invoices as evidence for reclaiming the VAT you charged, and a registered business supplying standard-rated or reduced-rated goods or services to another VAT-registered business must give it one (https://www.gov.uk/guidance/vat-guide-notice-700). GOV.UK puts it simply: use VAT invoices if you and your customer are both VAT registered (https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include).

**Tax invoice rules in three places (summary; check the source for full detail)**
|  | UK (VAT invoice) | Australia (tax invoice) | EU (VAT invoice) |
| --- | --- | --- | --- |
| When required | Standard or reduced-rated supplies to a VAT-registered customer | Within 28 days of a customer asking, unless the sale is $82.50 or less including GST | Most business-to-business supplies, and some business-to-consumer ones |
| Time limit | Normally within 30 days of the supply | 28 days from the request | EU-wide rules plus national rules; check the member state |
| Shorter format | Simplified invoice for supplies of £250 or less including VAT | Sales under $1,000 need 7 details; $1,000 or more also need the buyer’s identity or ABN | Simplified invoice with less information |
| Must identify itself | Yes, with a sequential invoice number and VAT number | Yes, it must be clear the document is intended to be a tax invoice | Yes, with a sequential number and the supplier’s VAT number |

The UK time limit and £250 threshold come from VAT Notice 700/21 (https://www.gov.uk/guidance/record-keeping-for-vat-notice-70021). The ATO’s seven details for a sale under A$1,000 are: that the document is intended to be a tax invoice, the seller’s identity and ABN, the issue date, a brief description with quantity and price, the GST amount, and the extent to which each sale is taxable (https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/tax-invoices). If you price GST-inclusive, the ATO also lets you show the GST as “Total price includes GST”, provided it is exactly one-eleventh of the total. On an A$880 sale that is A$80.00, and on A$1,650 it is A$150.00. The [GST calculator](/calculators/gst-calculator) and the [VAT calculator](/calculators/vat-calculator) do the inclusive and exclusive splits for any rate.

So when should the title say “Tax Invoice”? Where the local rule asks the document to identify itself, as in Australia, use the words. Elsewhere the content is what counts. If you are not registered, do not call it a tax invoice at all. HMRC says only a VAT-registered person can issue a VAT invoice and that there are financial penalties for unauthorised issue (https://www.gov.uk/guidance/vat-guide-notice-700). For more on registration and collecting sales tax, see the [GST and sales tax compliance guide](/blog/business/gst-sales-tax-compliance).

### Commercial invoice for exports

A commercial invoice (also called an export invoice) is the invoice that travels with goods across a border. UK government export guidance describes it as a basic statement of what is being bought and sold, essential for customs clearance, and also used to release payment and support insurance claims (https://www.business.gov.uk/export-from-uk/learn/categories/funding-financing-and-getting-paid/get-paid/how-create-export-invoice/).

It asks for far more than a domestic invoice. The same guidance lists, among other things, the consignee if different from the buyer, related paperwork such as the pro forma or purchase order, weights and packages, the harmonised system (HS) code, the agreed Incoterms, the country of origin, transport details, and freight and insurance charges.

## Credit note vs debit note

A credit note reduces what a customer owes on an invoice you have already issued; a debit note increases it. Once an invoice is sent and recorded you should not edit or delete it, so a second document adjusts it and both sets of books keep a clear trail. HMRC describes credit notes as documents that amend or correct previously issued invoices, and says debit notes might be issued where the price for a supply increases, instead of raising a supplementary invoice (https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec13010).

Where VAT is involved, a credit note has its own validity rules. HMRC’s VAT guide says that to be valid for VAT a credit note must reflect a genuine mistake, overcharge or agreed reduction, be issued within 14 days of the refund being made to the customer, give real value to the customer, and show specific details (https://www.gov.uk/guidance/vat-guide-notice-700). Beyond the usual supplier and customer details, those include a description and amount for each item credited, the rate and amount of VAT credited, and the number and date of the original VAT invoice.

The 14 days start when you actually make the refund, not when you agree it, as HMRC’s consideration manual explains (https://www.gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc06635). A debit note is different: HMRC’s VAT guide says it must be issued within 14 days of the increase being agreed. If you issue a commercial credit note that does not adjust VAT, HMRC says it should state “This is not a credit note for VAT”.

In Australia the equivalent is an adjustment note, and the ATO says you generally need a valid one before making a decreasing GST adjustment, unless the adjustment is for GST of A$75 or less; its own example is a A$660 discount, which reduces GST by A$60 and so needs no note (https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/managing-gst-in-your-business/reporting-paying-and-activity-statements/making-adjustments-on-your-activity-statements/adjustment-notes). In the EU, the European Commission says a credit note, debit note or other document treated as an invoice must make a specific, unambiguous reference to the original invoice and the details being amended (https://taxation-customs.ec.europa.eu/taxation/vat/vat-businesses/invoicing_en).

> **A credit note is not a bad-debt write-off** — HMRC’s trader records manual lists “not be issued for a bad debt” among the conditions for a valid credit note (https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec13040). Non-payment is a collection problem with its own relief rules. The [overdue invoices guide](/blog/business/overdue-invoice-follow-up-and-late-fees) covers chasing and, as a last resort, writing off.

## Bill vs invoice, and where a statement fits

In most business use, a bill and an invoice are the same document seen from different sides. You send an invoice; your customer receives a bill. Accounting software reflects this: sales invoices sit in accounts receivable, while supplier bills sit in accounts payable. Nothing about the word “bill” changes what the document must contain.

In consumer settings, “bill” usually means a request for immediate payment. A restaurant bill is really an invoice paid on the spot, after which the card slip acts as the receipt. What the document must contain depends on whether it is being used as a VAT or GST invoice, not on what it is called.

A statement of account is different. It lists the invoices, credit notes and payments on a customer’s account over a period and shows the balance still open. It does not create a new charge, so it should never replace an invoice; it prompts payment of invoices already sent. Tracking how long your invoices stay open is what the [days sales outstanding calculator](/calculators/days-sales-outstanding-calculator) measures.

## One job, every document: a worked example

Here is a hypothetical job followed from first contact to final adjustment. Say a VAT-registered joinery workshop in the UK is asked by a design studio (also VAT registered) to build and fit oak shelving. VAT is at 20%, and every amount is rounded to the penny.

### Step 1: the quote

The scope is clear, so the workshop issues a quote rather than an estimate, numbered Q-0112 and valid for 30 days. It asks for a 50% deposit before materials are ordered.

**Quote Q-0112**
| Line | Qty | Unit price | Net | VAT 20% | Gross |
| --- | --- | --- | --- | --- | --- |
| Oak shelving unit, 2.4 m | 4 | £385.00 | £1,540.00 | £308.00 | £1,848.00 |
| Installation labour (hours) | 12 | £45.00 | £540.00 | £108.00 | £648.00 |
| Delivery | 1 | £60.00 | £60.00 | £12.00 | £72.00 |
| Total |  |  | £2,140.00 | £428.00 | £2,568.00 |

### Step 2: the purchase order

The studio raises PO-7731 for £2,140.00 plus VAT, referring to Q-0112. Every later document carries PO-7731, because that is how the studio’s accounts team will find and approve it.

### Step 3: the pro forma for the deposit

To collect the 50% deposit, the workshop sends pro forma PF-0031 for £1,284.00, marked “This is not a VAT invoice”. That is half of the £2,568.00 gross. The pro forma does not go into the sales ledger, and the studio cannot reclaim any VAT on it.

### Step 4: a VAT invoice for the deposit, marked Paid

The studio pays £1,284.00. Because a deposit that is an advance payment creates a tax point when it is received, the workshop now issues a VAT invoice for it: INV-0412, one line “Deposit on quote Q-0112, PO-7731”, net £1,070.00 plus VAT £214.00, total £1,284.00. Since the money has already arrived, the invoice is marked Paid, so it also serves as the studio’s receipt for the deposit.

### Step 5: the final VAT invoice

After fitting, the workshop issues INV-0418 for the whole job, deducting the deposit already invoiced as a negative line. If it instead listed the full £2,568.00 and entered £1,284.00 as “amount paid”, the page would show £428.00 of VAT when £214.00 of it was already charged on INV-0412. Deducting the deposit net of VAT keeps each invoice’s VAT correct.

**Final VAT invoice INV-0418 (PO-7731)**
| Line | Qty | Unit price | Net |
| --- | --- | --- | --- |
| Oak shelving unit, 2.4 m | 4 | £385.00 | £1,540.00 |
| Installation labour (hours) | 12 | £45.00 | £540.00 |
| Delivery | 1 | £60.00 | £60.00 |
| Less deposit invoiced on INV-0412 | 1 | −£1,070.00 | −£1,070.00 |
| Subtotal |  |  | £1,070.00 |
| VAT at 20% |  |  | £214.00 |
| Balance due |  |  | £1,284.00 |

The studio pays the £1,284.00 balance, and the workshop marks INV-0418 as Paid as its receipt. Across the two invoices the studio has been charged £2,140.00 net and £428.00 of VAT, exactly as quoted.

### Step 6: a credit note for a partial refund

A week later the studio reports a finish defect on one unit. Rather than remake it, the two sides agree a £120.00 reduction on that unit. The workshop refunds £144.00 (£120.00 plus £24.00 VAT) and, within 14 days of that refund, issues credit note CN-0007 referring to INV-0418 and its date: one line “Price reduction, finish defect on one oak shelving unit”, quantity −1 at £120.00, net −£120.00, VAT −£24.00, total −£144.00.

**The whole job, document by document**
| Document | Reference | Net | VAT | Gross | In the sales ledger? |
| --- | --- | --- | --- | --- | --- |
| Quote | Q-0112 | £2,140.00 | £428.00 | £2,568.00 | No |
| Purchase order (buyer) | PO-7731 | £2,140.00 | £428.00 | £2,568.00 | No |
| Pro forma | PF-0031 | £1,070.00 | £214.00 | £1,284.00 | No |
| Deposit VAT invoice (Paid) | INV-0412 | £1,070.00 | £214.00 | £1,284.00 | Yes |
| Final VAT invoice (Paid) | INV-0418 | £1,070.00 | £214.00 | £1,284.00 | Yes |
| Credit note | CN-0007 | −£120.00 | −£24.00 | −£144.00 | Yes |
| Net result of ledger documents |  | £2,020.00 | £404.00 | £2,424.00 |  |

The ledger lines check out: £1,070.00 + £1,070.00 − £120.00 = £2,020.00 net, and 20% of that is £404.00. The cash checks out too: the studio paid £1,284.00 twice and received £144.00 back, so £2,424.00 changed hands, matching the gross total. Only three of the six documents enter the books.

## Which of these the free document tools can produce

Three free tools on this site share one engine: the [invoice generator](/tools/invoice-generator), the [estimate and quote generator](/tools/estimate-generator) and the [receipt maker](/tools/receipt-maker). Between them, and with the invoice generator’s editable title, they cover most of the lifecycle. All three run in your browser, build the PDF on your device and share your business details, clients and history.

**Document types and which tool produces them**
| Document | Supported? | How |
| --- | --- | --- |
| Invoice | Yes | The default title |
| Tax invoice / VAT invoice | Yes | Choose the Tax Invoice title, fill in your tax ID and the client’s, and set up to six named taxes at their own rates |
| Pro forma invoice | Yes | Choose the Proforma Invoice title and add “This is not a VAT invoice” in the notes where relevant |
| Receipt for a paid invoice | Yes, as a paid invoice | Mark the invoice as Paid: it prints a PAID stamp and a zero balance |
| Part payment or deposit already received | Yes | Enter the amount already paid; the balance due updates, and shows as a credit balance if overpaid |
| Credit note | Yes, with care | Edit the title to Credit Note, use negative quantities or prices, and add the original invoice number and date as a custom field; the total then prints as a credit balance |
| Quote or estimate | Yes | The estimate and quote generator: a valid-until date, a deposit request and a sign-to-accept block, then Convert to invoice once it is accepted |
| Standalone receipt | Yes | The receipt maker: paid in full or part payment, payment method and reference; Create receipt in the invoice generator fills it from the invoice |

Two cautions. A credit note should take its own number series (CN-0007), so type the number yourself instead of accepting the suggested invoice number. And the generator makes documents; it does not send them, take payments or record your VAT, so the credit note and refund still need entering in your own accounts.

Tool: [Build the invoice, the pro forma or the paid copy](https://dothecalculation.com/tools/invoice-generator) — Title presets for Invoice, Tax Invoice and Proforma Invoice, a PAID stamp for receipts, and negative lines for credits and deposits already invoiced.

## Sources

- HMRC VAT Notice 700: VAT invoices, pro formas (17.3), deposits (14.2), credit and debit notes (18.2.3, 18.2.4): https://www.gov.uk/guidance/vat-guide-notice-700
- HMRC VAT Notice 700/21: 30-day limit, £250 simplified invoices: https://www.gov.uk/guidance/record-keeping-for-vat-notice-70021
- HMRC VATREC9010, pro forma invoices defined and kept out of the books: https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec9010
- HMRC VATREC9020, pro formas and input tax; full VAT invoice within 30 days: https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec9020
- HMRC VATREC13010, purpose of credit and debit notes: https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec13010
- HMRC VATREC13040, conditions of a valid credit note, including not for a bad debt: https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec13040
- HMRC VATSC06635, 14-day credit note limit runs from the refund: https://www.gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc06635
- GOV.UK, invoices and VAT invoices when both parties are registered: https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include
- Consumer Rights Act 2015, section 50, statements about a service are binding: https://www.legislation.gov.uk/ukpga/2015/15/section/50
- Consumer Rights Act 2015, section 51, reasonable price where none is fixed: https://www.legislation.gov.uk/ukpga/2015/15/section/51
- business.gov.uk, how to create a commercial (export) invoice: https://www.business.gov.uk/export-from-uk/learn/categories/funding-financing-and-getting-paid/get-paid/how-create-export-invoice/
- Australian Taxation Office, tax invoices: 28 days, $82.50 and $1,000 thresholds, required details: https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/tax-invoices
- Australian Taxation Office, adjustment notes and the $75 threshold: https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/managing-gst-in-your-business/reporting-paying-and-activity-statements/making-adjustments-on-your-activity-statements/adjustment-notes
- European Commission, VAT invoicing rules and documents amending invoices: https://taxation-customs.ec.europa.eu/taxation/vat/vat-businesses/invoicing_en
- IRS, supporting documents including invoices and receipts: https://www.irs.gov/businesses/small-businesses-self-employed/what-kind-of-records-should-i-keep

This is general information, not tax or legal advice. Rules differ by country and change over time, so check the current guidance from your own tax authority before relying on a threshold or time limit.

## Where to go next

Once you know which document you need, [how to write an invoice](/blog/business/how-to-write-an-invoice) goes line by line through filling one in, numbering it and keeping the record. If the question is when the money should arrive, [invoice payment terms explained](/blog/business/invoice-payment-terms-explained) covers Net 30, deposits and stage payments.

Each document on either side of the invoice has its own guide. [How to write an estimate](/blog/business/how-to-write-an-estimate) prices a job line by line, and [quote deposits and validity](/blog/business/quote-deposit-and-validity) settles how much to ask up front and how long the price should hold. After payment, [how to write a receipt](/blog/business/how-to-write-a-receipt) covers proof of payment, and landlords have the [rent receipt guide](/blog/property/rent-receipt-guide).

Working for yourself? [How to invoice as a freelancer](/blog/business/how-to-invoice-as-a-freelancer) deals with deposits, expenses and foreign clients. And if an invoice is already late, the guide to [overdue invoice follow-up and late fees](/blog/business/overdue-invoice-follow-up-and-late-fees) sets out what to send and when.

## Common questions

**Is a receipt the same as an invoice?**

No. An invoice asks for payment and shows an amount due; a receipt confirms payment has been made. An invoice marked Paid is often used as the receipt. A simple till receipt may not contain everything a VAT or GST invoice needs, so a registered customer who wants to reclaim tax may still need a proper tax invoice.

**Is a quote legally binding?**

A quote is usually treated as a firm offer, and once the customer accepts it the price becomes part of the agreement on the quote’s terms, such as its validity date and scope. In the UK, what a trader says or writes about a service can become a contract term if a consumer relies on it. Exact rules depend on the country and on whether the customer is a business or a consumer.

**What is the difference between an estimate and a quote?**

An estimate is an informed approximation used when the final cost depends on things not yet known, such as hidden damage or hours needed. A quote is a fixed price for a defined scope. Give an estimate a range or a cap and say how the final price will be worked out; give a quote a validity date and a clear list of what is included and excluded.

**Can I claim VAT back on a pro forma invoice?**

Not in the UK. HMRC says pro forma invoices cannot be used as evidence to reclaim input tax, even if they show every detail of a VAT invoice, and should be marked “this is not a VAT invoice”. Once the supplier receives payment or supplies the goods or services, they must issue a proper VAT invoice, and that is the document the buyer uses to reclaim.

**Do I need to write “Tax Invoice” on my invoices?**

It depends where you are. In Australia, the ATO requires a tax invoice to make clear it is intended to be a tax invoice, and the words “Tax Invoice” are the simple way to do that. In the UK the requirement is the content of a VAT invoice rather than a specific title. If you are not registered for VAT or GST, do not call your document a tax invoice.

**When should I issue a credit note instead of a new invoice?**

Issue a credit note whenever an invoice you have already sent needs to go down: returned goods, an overcharge, or a discount agreed afterwards. Do not edit or delete the original. The credit note should quote the original invoice number and date. For UK VAT, HMRC says it must be issued within 14 days of making the refund, and it cannot be used to write off a bad debt.

**Who issues a debit note, the buyer or the seller?**

Usually the seller, to increase an invoice after an undercharge or an agreed price rise, as an alternative to a supplementary invoice. Some buyers also raise a document called a debit note when they return goods and claim money back from a supplier, which is why the term confuses people. For UK VAT, a debit note must be issued within 14 days of the increase being agreed.

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_Source: [Do The Calculation](https://dothecalculation.com/blog/business/invoice-vs-receipt-vs-quote). Quote freely with attribution and a link to this page._