Invoice vs. Receipt vs. Estimate vs. Proforma: Which Document Do You Need?
A plain-English guide to the six billing documents small businesses send, in the order you send them, with what each must include.
Small businesses send the same customer up to six different documents. Using the right one at the right time gets you paid faster and keeps your records clean.
| Document | Sent when | Asks for payment? | Proves payment? |
|---|---|---|---|
| Estimate / Quote | Before work starts | No | No |
| Proforma invoice | Before shipping or advance payment | Not formally | No |
| Purchase order | Buyer orders from supplier | No | No |
| Invoice | After delivery | Yes | No |
| Receipt | After you are paid | No | Yes |
| Credit note | After a return or overcharge | Reduces it | No |
A typical flow
- Estimate – the client agrees to the price and signs the “Accepted by” line.
- Invoice – after the work or delivery, with a due date and payment details.
- Receipt – once the money arrives (partial payments show the balance remaining).
- Credit note – only if something is returned or was overcharged. Never edit an invoice you already sent.
What every billing document should show
- Your business name, address and tax ID (VAT, GST, ABN or EIN where required)
- The customer’s name and address
- A unique, sequential number and the issue date
- Clear line items with quantity, unit price and amount
- Tax shown separately, and the total in a stated currency
Tax rules differ by country. If you are VAT- or GST-registered, your tax authority may require extra details on invoices (for example the tax rate per line and the customer’s VAT number for business sales).
Last reviewed: October 2026. General information, not legal or tax advice.