Definition
An invoice is a document a seller sends to a buyer to request payment for goods or services that have been delivered. It lists what was provided, the quantities and prices, the total due, the payment terms, and a unique invoice number so both parties can track and reference it.
Also called: Bill, Sales invoice
Invoice in practice
Invoices serve three jobs at once. They tell the client exactly how much to pay and by when, they create a legal record of the sale for both sides, and they feed your bookkeeping so revenue and outstanding balances are tracked correctly.
A complete invoice includes the seller and buyer details, invoice number, issue date, due date or payment terms, itemized line items, subtotal, taxes and discounts, total due, and payment instructions. Many jurisdictions also require a tax identification number.
Invoices are usually sent after delivery, or at agreed milestones for longer projects. For work billed before delivery, a proforma invoice or deposit invoice is used instead.
Example
A web designer finishes a homepage redesign on March 3 and sends invoice INV-0042 for $1,800 with Net 15 terms. The client owes $1,800 by March 18.
Frequently Asked Questions
Is an invoice the same as a bill?
In practice yes. "Invoice" is what the seller calls the document they send; "bill" is what the buyer calls the same document when they receive it. Both describe a request for payment.
Is an invoice a legal document?
An invoice is a legally recognized record of a transaction and is used as evidence in payment disputes and for tax reporting. On its own it is not a contract, but it documents an obligation created by an agreement.
Can an invoice be sent before work is done?
Yes, for deposits or advance payments, but label it clearly as a deposit invoice or use a proforma invoice. The final invoice after delivery should reference any amounts already paid.