Thursday, December 28, 2023

Invoice vs Receipt

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An invoice and a receipt are both documents related to the process of buying and selling, but they serve different purposes.

Which one should I upload for expenses?
A receipt is better.

If you have to choose between an invoice and a receipt for tracking expenses, a receipt is generally more suitable because it is direct evidence that a payment has been made. It confirms that the transaction has been completed and the expense has actually occurred.

What are the differences between an invoice and a receipt?

Purpose:

Invoice: A request for payment for goods or services rendered.
Receipt: Proof of payment for goods or services purchased.

Timing:

Invoice: Issued before payment, often to initiate a payment process.
Receipt: Provided after payment as confirmation that payment has been received.

Legal and Tax Implications:

Both the invoice and the receipt can be legally binding documents.

Invoice: Indicating an obligation to pay.
Receipt: Serves as evidence that a transaction has occurred.

For reconciling bank statements and during audits, receipts provide the necessary proof of payment, making them essential for validating expenses for your business.

We recommend using Receipt-AI to track your documents. Whether it's a receipt, invoice, purchase order, packing slip, or any other similar document, simply take a picture and text it, and allow the AI to handle the rest: extracting the date, name, total, and line items, renaming the file, and uploading it to your accounting software like QuickBooks or Xero—all done within 5 seconds. Receipt-AI is by far the most convenient way to upload your receipts.