Let\u2019s begin by having a thorough understanding of an invoice.<\/p>\n\n\n\n
An invoice is a commercial document that contains an itemized list of sold products and services along with the amount to be paid against it. Invoices act as a legal document issued to the customer before the payment is made. It is shared with the client with an expectation of receiving the due amount within a specific time, like 30 or 90 days.<\/p>\n\n\n\n
An Invoice helps businesses:<\/p>\n\n\n\n
- \n
- Track Payments<\/li>\n\n\n\n
- Maintain Sales Records<\/li>\n\n\n\n
- Provide Legal Protection<\/li>\n\n\n\n
- File Tax Accurately<\/li>\n\n\n\n
- Identify Business Trends<\/li>\n<\/ul>\n\n\n\n
![\"Gimbooks](\"https:\/\/cdn.techjockey.com\/blog\/wp-content\/uploads\/2024\/03\/15163943\/Gimbooks-Blog-Advertisement-Banner.jpg\")
<\/a><\/figure><\/div>\n\n\n<\/span>What\u2019s Included in an Invoice?<\/span><\/h3>\n\n\n\n
To make sure that your invoice is legally accepted, it should contain the following elements. You can find several invoice templates online that adhere to the basic structure of a professional invoice.<\/p>\n\n\n
\n![\"invoice](\"https:\/\/cdn.techjockey.com\/blog\/wp-content\/uploads\/2022\/02\/18183954\/invoice-vs-receipt-1024x536.jpg\")
<\/figure><\/div>\n\n\n- \n
Company Branding: <\/strong>The company logo and the headline \u2018INVOICE\u2019 should be prominent in your generated invoice to ease identification.<\/p><\/li>\n\n\n\n
Invoice Number: <\/strong>Every issued invoice should have a unique invoice number that will help you in keeping clear records and distinguishing between clients.<\/p><\/li>\n\n\n\n
Dates: <\/strong>The generated invoice should contain all the dates. These include the date on which the invoice was issued, when the products or services were sold, and the due date for payment.<\/p><\/li>\n\n\n\n
Seller’s Contact Information: <\/strong>The issued invoice should mention the seller\u2019s name, address, and other contact information like phone number and email address.<\/p><\/li>\n\n\n\n
Buyer\u2019s Contact Information: <\/strong>To be legally sound, the issued invoice should contain the buyer\u2019s information and address.<\/p><\/li>\n\n\n\n
Terms & Conditions: <\/strong>All the terms and conditions like penalties for late payment, due dates, or partial payments should be clearly mentioned in the invoice itself to ensure 100 percent transparency.<\/p><\/li>\n\n\n\n
List of Goods and Services: <\/strong>The invoice should have all the line items with a one-line detailing about the product or service.<\/p><\/li>\n\n\n\n
Additional Charges: <\/strong>Your invoice must have a separate mention for additional charges like tax or freight.<\/p><\/li>\n\n\n\n
Cost Per Unit: <\/strong>No matter what quantity of products you sell, every line item should have the cost per unit and quantity of goods sold mentioned separately.<\/p><\/li>\n\n\n\n
Total Amount with Currency: <\/strong>To sum up the invoice, mention invoice price, the total due amount after calculating additional charges along with the currency.<\/p><\/li>\n\n\n\n
Thank You Note: <\/strong>In the end, add a personalized thank you note, showing gratitude for business collaboration.<\/p><\/li>\n<\/ul>\n\n\n\n
Suggested Read: Best GST Billing Software for Small Business in India<\/a><\/strong><\/p>\n\n\n\n
<\/span>What Is a Bill?<\/span><\/h2>\n\n\n\n
A bill is issued to you as a customer for purchasing products or services. It is an invoice that you as a business receive, and enter it as a bill in your books.<\/p>\n\n\n\n
You are required to pay the due amount mentioned on the bill to the seller or service provider. The bill is generated to receive instant payment from the customer like restaurant bills, grocery bills, movie ticket bills, etc.<\/p>\n\n\n\n
A bill enables a business to:<\/p>\n\n\n\n
- \n
- Maintain a record of purchases in a particular fiscal year<\/li>\n\n\n\n
- Act as a reminder for due payments<\/li>\n\n\n\n
- Serve as proof of transaction<\/li>\n<\/ul>\n\n\n\n
<\/span>What\u2019s Included in a Bill?<\/span><\/h3>\n\n\n
\n![\"difference](\"https:\/\/cdn.techjockey.com\/blog\/wp-content\/uploads\/2022\/02\/18183937\/difference-between-receipt-and-bill-1024x536.jpg\")
<\/figure><\/div>\n\n\nA bill should contain the following essential information:<\/p>\n\n\n\n
- \n
Date of Purchase: <\/strong>A bill should clearly mention the date of purchase, it helps in bookkeeping records.<\/p><\/li>\n\n\n\n
List of Items: <\/strong>The received bill must contain a list of line items purchased, with cost per unit, and the quantity.<\/p><\/li>\n\n\n\n
Price: <\/strong>Against every line item, the related price should be mentioned.<\/p><\/li>\n\n\n\n
Buyer\u2019s Information: <\/strong>This must include the buyer\u2019s name, billing address, email address, and contact number.<\/p><\/li>\n\n\n\n
Seller\u2019s Information: <\/strong>A received bill should also include the name, address, and contact information of the seller or the service provider.<\/p><\/li>\n\n\n\n
Payment Methods: <\/strong>A bill should contain mentions of different payment methods in which transactions can be processed.<\/p><\/li>\n\n\n\n
Warranty\/ Guarantee Policies: <\/strong>If your products claim to provide any warranty or guarantee, those should be added to the bill.<\/p><\/li>\n\n\n\n
Amount to be Paid: <\/strong>The bill should contain separate amounts for specific line items, and the total amount to be paid after all the calculations.<\/p><\/li>\n\n\n\n
Taxes: <\/strong>A bill should include a specific mention of taxes with the percentage charged.<\/p><\/li>\n\n\n\n
Signatures: <\/strong>The bill should have the signature of all the parties involved including the buyer, seller, and the notary public, if required.<\/p><\/li>\n<\/ul>\n\n\n\n
Suggested Read: Best Free Invoicing Software for Small Businesses<\/a><\/strong><\/p>\n\n\n\n
<\/span>What Is a Receipt?<\/span><\/h2>\n\n\n\n
A receipt is a commercial document that is issued when the payment is received against a bill or invoice. It is proof of the payment received. The receipt can be issued immediately after the payment, or as and when the payment is made.<\/p>\n\n\n\n
Receipts work as a:<\/p>\n\n\n\n
- \n
- Proof of payment for the customer<\/li>\n\n\n\n
- Proof of payment completion for the seller<\/li>\n\n\n\n
- Sales tracker for the seller<\/li>\n<\/ul>\n\n\n\n
<\/span>What\u2019s Included in a Receipt?<\/span><\/h3>\n\n\n
\n![\"receipt](\"https:\/\/cdn.techjockey.com\/blog\/wp-content\/uploads\/2022\/02\/18184003\/receipt-vs-bill-1024x536.jpg\")
<\/figure><\/div>\n\n\nThese are a few standard components that should be added while generating a receipt.<\/p>\n\n\n\n
- \n
Date of Purchase: <\/strong>The receipt must include the date and time when the purchase was made.<\/p><\/li>\n\n\n\n
Receipt Number: <\/strong>Every generated receipt should have a unique identification number that must be added to the financial books.<\/p><\/li>\n\n\n\n
Additional Charges: <\/strong>Any additional charges like tax, installation, or freight should be mentioned separately while issuing a receipt.<\/p><\/li>\n\n\n\n
Amount Paid: <\/strong>Along with separate line items, the total or partial amount that has been paid should be mentioned in the receipt.<\/p><\/li>\n\n\n\n
Seller\u2019s Information: <\/strong>The receipt must contain the seller\u2019s contact information like name, address, email, and phone number.<\/p><\/li>\n\n\n\n
Payment Method: <\/strong>The payment method like cash, UPI, or debit card should be mentioned in the receipt.<\/p><\/li>\n\n\n\n
Return or Exchange Policy: <\/strong>Terms and conditions for returns and exchange of the product should be mentioned clearly in the receipt. This helps the clients get additional services when required.<\/p><\/li>\n<\/ul>\n\n\n\n
![\"difference](\"https:\/\/cdn.techjockey.com\/blog\/wp-content\/uploads\/2022\/02\/18183929\/difference-between-invoice-and-receipt-1024x536.jpg\")
<\/figure><\/div>\n\n\n![\"Why](\"https:\/\/cdn.techjockey.com\/blog\/wp-content\/uploads\/2022\/02\/06150610\/Why-Use-Billing-Invoicing-Software-for-Your-Business-_Infographics-599x1024.png\")
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