What is an Invoice?
An invoice is a commercial document issued by a seller to a buyer relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer.
Interactive Invoice Anatomy
Click the markers to learn about each essential part of a professional invoice.
Why is an Invoice Important?
For freelancers and small business owners, an invoice is more than just a piece of paper. It is the key to getting paid. It serves as:
Payment Request
It formally notifies your client that it's time to pay for the work completed.
Legal Record
It protects both parties by documenting exactly what was sold and when it was delivered.
Tax Requirement
Accurate invoices are essential for filing taxes and claiming business expenses.
Professionalism
A branded, well-structured invoice sets a professional tone for your business.
Difference Between Invoice and Receipt
This is a common confusion! The key difference lies in timing.
- An Invoice is sent before payment to request money.
- A Receipt is sent after payment to prove money was received.
Essential Elements of an Invoice
To be legally valid and professional, every invoice should contain:
- The Word "Invoice": Clearly displayed at the top.
- Invoice Number: A unique identifier (e.g., INV-001).
- Date of Issue: When the invoice was sent.
- Contact Information: Both yours and your client's.
- Description of Goods/Services: Clear line items.
- Total Amount Due: Including taxes if applicable.