The short answer
An invoice comes after the work and says "here's what you owe." A receipt comes after the money and says "here's what you paid." Same job, same client, often the same numbers, but they do opposite jobs.
Most tradespeople use a third document as well: the estimate, which comes before any work starts. Put all three side by side and the difference is hard to miss.
One job, three documents
| Estimate | Invoice | Receipt | |
|---|---|---|---|
| When | Before the work | After the work, or a stage of it | After a payment |
| Purpose | Win the job and agree the scope | Ask for payment | Confirm payment |
| What it says | "This is what it will cost" | "This is what you owe, and by when" | "We received this amount, on this date" |
| Typical title | Estimate or Quote | Invoice | Receipt or Payment receipt |
Follow a water heater job from start to finish
A homeowner in Columbus has no hot water. A plumber comes out, finds the old tank has failed and recommends a new 50-gallon gas heater.
- The estimate. Before touching anything, the plumber prices the swap: the heater, the labor, the fittings, disposal of the old tank and the city permit. The homeowner approves it. Nothing is owed yet. For how to put one together, see how to write an estimate.
- The invoice. The new heater is in and working. The plumber sends an invoice with six lines: service call $89, the heater $1,185, 3.5 hours of labor at $115, fittings and expansion tank $142.60, haul-away $65 and the permit $75. Subtotal $1,959.10, tax $146.93, total $2,106.03, due on receipt. You can see the whole thing on the plumbing invoice template. This document asks for money. It doesn't show that any was paid.
- The receipt. The homeowner pays $2,106.03 by card through the payment link. The plumber sends a receipt with the date, the amount, the payment method, the invoice number it pays and a balance of $0. Now the client has proof they paid, and the plumber has a record that the invoice is closed.
Deposits: a receipt first, then an invoice for the balance
Now say the plumber asks for $600 before ordering the heater. The documents shift:
- Estimate, approved at $2,106.03.
- Receipt for the deposit: $600 received, with the date, the method and a note such as "Deposit toward water heater replacement."
- Invoice when the work is done: the full $2,106.03, less the $600 deposit, balance due $1,506.03.
- Receipt for the balance: $1,506.03 received, balance $0.
Some trades send a deposit invoice first and a receipt once it's paid. Either way works. What matters is that every payment gets a receipt, and the final invoice shows what was already paid so nobody pays twice.
Partial payments
Sometimes the client pays part now and the rest later. Say they pay $1,000 today and the rest on Friday. Send a receipt for $1,000 that shows the invoice total, the amount paid so far and what's left: $1,106.03. When Friday's money arrives, send a second receipt showing a zero balance. The invoice stays open until it's paid in full.
In TapBill you record each partial payment on the invoice, and once it's paid in full, one tap turns it into a receipt. Receipts are free and unlimited on every plan.
Cash jobs
Cash is where receipts matter most, because there's no bank record behind the payment. If a client hands you $300 for a faucet swap, write a receipt right there: the date, the amount, "cash," what it was for and your business name. Keep a copy for yourself.
On a small job paid on the spot, you can skip the invoice and go straight to a receipt that lists the work. It does both jobs at once: it shows what was done and that it's settled. You can make one free in the receipt generator.
What each document should show
An invoice: your business details, the client and job address, an invoice number, the date and due date, each line of work with quantity and price, subtotal, tax and total, any deposit already paid, the balance due and how to pay.
A receipt: your business details, the client, a receipt number, the date paid, the amount, the payment method, what it pays for (usually the invoice number) and any balance left. Put "Receipt" or "Paid" clearly at the top so no one mistakes it for a bill.
How long you keep these and what your tax office expects on them depends on where you work. Check with your accountant or tax office.
Invoice vs bill
Same document, seen from two sides. You send an invoice; your client receives a bill. "Bill" is the everyday word, and some businesses use it for what they owe their own suppliers. If a client asks for "the bill," send the invoice. If they ask for "a receipt," they want proof they already paid.
To make the invoice itself, use the invoice generator or read how to make an invoice. For the price you give before the job, start in the estimate generator.
Frequently asked questions
Can an invoice replace a receipt?
Not on its own. An invoice shows what was owed, not that it was paid. Some businesses mark an invoice "Paid" with the date and payment method, and many clients accept that. Whether it's enough for your records depends on local rules, so check with your accountant or tax office. A separate receipt is the clearest option.
Does invoice mean paid?
No. An invoice is a request for payment. Until the money arrives it's an open invoice, and the client still owes the amount on it. A receipt, or an invoice clearly marked paid, is what shows the payment happened.
Do I need a receipt if I have an invoice?
Your client will usually want one, because the invoice alone doesn't show they paid. For you, it's a clean record that the job is settled. Whether a receipt is required for tax purposes depends on where you work, so ask your accountant or tax office.
Is an invoice a proof of purchase?
An invoice shows what was sold, to whom and for how much, so people often keep it together with proof of payment, such as a receipt or bank statement. On its own it shows a sale was billed, not that it was paid. If you need it for a warranty claim, check what the manufacturer accepts.