Unlocking the Meaning of Invoice: Distinguishing it from Bill and Receipt

In the realm of business, international trade, and commerce, you've undoubtedly heard about Invoice, Bill, and Receipt. However, do you truly comprehend the essence of Invoice? Differentiating between Invoice, Bill, and Receipt is crucial in the fields of business, import, and export. Join us in exploring the following article to gain insights into various types of invoices and receipts.

Here, Mytour shares insights into the concept of Invoice. Understanding the Differences between Invoice, Bill, and Receipt. We invite you to follow along.

Demystifying Invoice: Exploring its Significance

Invoice, often referred to as a sales document, is a crucial proof of exchange in the buying and selling process. In the import-export industry, sellers create Invoices tailored to their products, deviating from standard tax forms imposed by tax authorities or government bodies.

Invoice is primarily categorized into two types: Proforma Invoice and Commercial Invoice.

- Proforma Invoice – PI (reference invoice): This type of invoice is generated when the buyer sends a purchase order (PO) to the seller. Upon receiving order details, the seller issues a reference invoice (PI) for the buyer's approval of prices and partial or full payment as a deposit or complete payment.
- Commercial Invoice – CI (commercial invoice): The commercial invoice serves legal and payment functions in product transactions. It is issued after the goods are loaded onto a container and shipped. The seller sends the buyer documents such as the commercial invoice, bill of lading, certificate of origin, etc., for payment processing.

An Invoice typically includes the following information:

• Title, Number, and Date of Invoice
• Seller's and Buyer's Name and Address
• Product Information: Description, Quantity, Unit Price, Total Amount in Words and Numbers
• Delivery Location Terms
• Payment Terms
• Port of Loading and Unloading
• Vessel Name, Voyage Number, etc.

Distinguishing Invoice, Bill, and Receipt

Invoice

Invoice serves as the official payment receipt used in formal procedures. It itemizes each item or service along with the corresponding prices that the buyer needs to pay. The seller issues the Invoice to the buyer as per the agreement.

Apart from listing goods and prices, an Invoice also includes details such as the company's tax identification number (tax number), the customer account number used for billing (customer account number), payment due date, and more.

Example: Invoice the order (generate invoices for ordered items to request payment), invoice somebody for an order (send an invoice to someone for payment of ordered items)…

Bill

A Bill is a payment request that demands payment for services used, such as electricity, water, gas, internet, etc., that you are currently using or owe.

Example: Invoices for electricity, internet, telephone bills…

Receipt

Receipt differs entirely from the two types, Bill and Invoice. A Receipt is proof, a confirmation that the goods or services you have used have been paid for.

Example: Receipts for service payments.

Here, Mytour shares insights into the concept of Invoice and distinguishes the differences between Invoice, Bill, and Receipt. We hope that through the insights provided in this article, you gain a clearer understanding of Invoice, Bill, and Receipt.