Invoice vs. Receipt - Am I Culturally Clueless?
December 19, 2014 1:21 PM   Subscribe

Are there areas outside the U.S. -- or well-run organizations within it -- where the words Invoice and Receipt are properly used interchangeably? Cultural issues below

As a small part of my job, I deal with hundreds of individuals per year who order our product. When they order our product online, they can choose to pay immediately via credit card, or pay later via check or money transfer. If they pay immediately, our system automatically sends them an email receipt and an email confirmation. If they choose to pay by check or money transfer, they automatically receive an emailed invoice and emailed payment instructions.

The issue is people who do not seem to know the difference between an invoice and a receipt. I have always understood it--and every credible source I've seen says--that an invoice is given to people who OWE money and a receipt is given to people who've PAID money.

We are a U.S. based company. I've had issues with this with many of our customers--or, more often, their secretaries--who seem unclear on this concept. That is, I often get asked for an invoice when people have already paid us. When I say, "I'm sorry, our system sent you a receipt because you are paid in full; the receipt shows you are paid in full." They say, "But I need an invoice."

Now, I believe several things might be going on here: 1. Their need to satisfy some bizarre bureaucratic requirement. 2. Their genuine confusion, among English speakers, as to the difference--I've met and worked with many fellow Americans who literally do not know a difference and we've had to get a high-up in accounting to tell them the difference. 3. Many of our customers are from outside the U.S. (from countries all over the world) and perhaps they are not knowledgeable of the English words--or perhaps their language does not distinguish?

The real reason I'm asking is because I've had several instances, in the past, where I've worked with people from a certain culture who were doing things "wrong" with our ordering system, only to find out that in their culture, they were using, say, capitalization, in the correct way.

So does anyone know of 1. Well-run American organizations who have deliberately decided to use "Invoices" and "Receipts" interchangeably? or 2. Countries/languages that recognize no such distinction in their business culture?
posted by Hypatia to Work & Money (26 answers total) 2 users marked this as a favorite
While it's safe to say that, as you indicate, a receipt is not an invoice and an invoice is not a receipt, it's also safe to say that not everyone has considered this distinction or even cares about the distinction.

I haven't heard of an organization in the United States that confuses these two terms, nor have I experienced dealing with a person in the United States who confuses these two terms, but I can easily see that people don't care to know the difference or are unaware of the difference. Not everyone, even native speakers, is good with language beyond that which is needed to conduct one's daily life.
posted by dfriedman at 1:25 PM on December 19, 2014 [1 favorite]

You may be dealing with administrative assistants who have specific instructions like "When you order a product, you must file the order invoice in FileA to show we needed to pay it, and the receipt in FileB to show it was paid."

With a lot of things, especially business-to-business type things, it used to be that you ordered something, received an invoice along with the product, and then paid the invoice and kept the receipt. I assume quite a few accounting procedures still work under that model.
posted by erst at 1:28 PM on December 19, 2014 [25 favorites]

Could be a leftover from an earlier time, when more frequently, one would send a supplier a purchase order for widgets; they'd send you a pallet of widgets and an invoice with payment terms (e.g. "net 30"); you'd pay for the widgets. Now for many things payment is expected in advance, but the idea of an invoice has stayed with many legacy systems. So if you have someone reading off a form or a screen, and it says they need an invoice (because it was written 50 years ago), then they'll ask for an invoice as proof of an order, even if what they get is a receipt.

I suspect that 90% of the time they will accept the receipt happily.
posted by chesty_a_arthur at 1:28 PM on December 19, 2014 [3 favorites]

You are correct, an invoice is an itemized order/request for payment, and a receipt shows that you've paid.

Some places may need an invoice retroactively for some bureaucratic reason (as you suggested) so it's good to clarify that with the person asking for it. "We don't normally send an invoice for customers who choose to pay us prior to shipment, we just send an itemized receipt." Does your workplace have a process in place for providing an invoice in this instance, sometimes the answer is, "no, we only have an itemized receipt."

Otherwise you're just dealing with people who are unclear on the concepts. Again, clarification is key, "Since the items were paid before shipment there was no invoice sent, would a copy of the itemized receipt work for you?" I'll bet that in 99.99% of cases, it will.
posted by Ruthless Bunny at 1:30 PM on December 19, 2014

Though this doesn't answer your question, I always understood the interchangeable term for an invoice to be also called a bill. Not a receipt. Just an observation.
posted by strelitzia at 1:30 PM on December 19, 2014 [1 favorite]

Does your invoice show different information from your receipt? When I - part of a large bureaucracy! - order things, sometimes I get a "receipt" which does not show shipping, does not have the full product name, tells me thanks for ordering but does not say how much or how I paid, etc. And thus it's not something I can submit as part of my monthly institutional credit card reconciliation. I don't know whether I'd call up and ask specifically for an invoice, but I might - I might be saying "invoice" to mean "document which shows all charges associated with this purchase".
posted by Frowner at 1:39 PM on December 19, 2014 [5 favorites]

In Europe there's requirements that a company needs issue "an invoice" whenever it sells a good to a "taxable person", where an invoice is defined as

An invoice may be any document in paper or electronic form, no matter what its title or function, that may serve to obtain a VAT deduction for a taxable person, provided that the conditions laid down in the Directive are fulfilled. There are no specific requirements on the format of an invoice.

When people are asking you for an invoice it's probably because

1. There's some piece of information missing from the receipt they need
2. They're blindly following a business process that says "get something with the word invoice on it"
posted by alan at 1:43 PM on December 19, 2014 [9 favorites]

I was getting ready to chime in and say, of course not! These words are not interchangeable, they have different purposes. However, in my law office, we do not (generally) issue "receipts" for payments; we only invoice. On our invoices it indicates that we received payment, and those credits are applied to the outstanding amount, but the document is still an "invoice." Therefore, if you ask for a receipt, I will give you an invoice, but with a zero balance.

Additionally, as Ruthless Bunny noted, there are some people who insist (either via their boss or via "the book") that unless all the boxes are checked, the task may not be done. As such, no invoice was received, so therefore we need one before that person can remove the document from their desk.

Logistical reasons for it may occur as well, for example merely providing a receipt to those pesky lawyers may not demonstrate the ordering of a thing, merely the payment for a thing. Payment for things not ordered might be refunded, and if there is an embezzlement problem in the past, demonstrating all the information may be needed.
posted by China Grover at 1:43 PM on December 19, 2014

I have always needed both an invoice (or price quote) and a receipt (or a confirmation that payment has been received) for all of my projects across three separate utility/government-related jobs.
posted by samthemander at 1:44 PM on December 19, 2014 [2 favorites]

an itemized list of goods shipped usually specifying the price and the terms of sale : bill

I come from a bicultural household and sometimes my understanding of English words isn't quite on the same page as other Americans.

So, FWIW: I don't actually think of invoice and bill as interchangeable. I think of invoice as a list of what was ordered. I think of bill as a statement that "you owe us X amount of money" and it doesn't necessarily give a detailed listing of the products. So, I see nothing weird about people saying what to my mind indicates "We need a record with a detailed list of the items we ordered." Presumably, they need that for some file system or inventory system. Inventorying the things you have on hand is an important thing in some organizations and is unrelated to how much money was spent.

I was expecting a completely different question below the fold. I was expecting you to say "Some people get invoiced and think they already paid and then wind up owing us bunches of money." I thought that was the confusion over invoice vs receipt: I thought you were going to say "But we have a record of paying, you said so." Based on what you actually asked, I think what people are saying is "we need a separate itemized list of products purchased, for our inventory system." Or something along those lines.

I will also second the idea that they may be checking off some antiquated bureaucratic requirement. I worked for a corporation for a bit over five years and in my last months there was trying to explain to new people what was really desired by some expression that had become outdated in the relatively short time I worked there. They would get asked for "screenshots" and have no idea what their boss wanted. What was wanted was a record of how much overtime they worked and how much work happened during that overtime, but screenshots per se were no longer really relevant to showing that because things had changed. So I can well imagine that their instructions say they need an invoice and nothing else will do.
posted by Michele in California at 1:44 PM on December 19, 2014

I've run into this when my email receipt didn't have every little detail that the buyer needed, and the missing detail is likely to be found on an invoice.

For example, an email receipt from a credit card processor might not show the full address of the seller, and some organizations might require that for their records, even for a dinky purchase with a credit card.

So the next time someone rejects your receipt and says that they need an invoice, you might ask, "Is there some information you need that isn't shown on the receipt?" If that's the case, you could add that info to the automatically generated receipt and see if requests for "invoices" go down.

Also, in countries outside the US, it's common to provide two options: the buyer can receive a receipt or an invoice. The invoice is an official record that the buyer can use to, for example, write off a business expense, while the receipt is less formal.

For example, when I had business cards printed in Spain, I handed the printer cash. The normal thing in the US would be to give me a receipt, and we'd be done. Instead, the printer asked if I needed an invoice or if just a receipt was okay. The invoice would be necessary if I had a Spanish business and I was planning to write off the cards as a business expense. It meets certain bureaucratic specifications and includes certain information. So there could be bureaucratic reasons for people to need an invoice instead of a receipt, and from their perspective, they're using the right word.
posted by ceiba at 1:45 PM on December 19, 2014 [1 favorite]

I was just about to say that I often receive a "zero balance invoice" as a receipt, then I saw that China Grover hinted at the same thing.

My life is currently tracking paperwork for compliance, and every invoice must reference a specific purchase order or change order.
posted by scruss at 1:46 PM on December 19, 2014 [1 favorite]

Also, now that I think about it, when I was told what materials we needed for a purchase on an institutional card, I was told "invoice" and "packing slip"...."receipt" is not the language used here.
posted by Frowner at 1:47 PM on December 19, 2014 [1 favorite]

For what it's worth, the IRS (arguably, a well-run American organization) uses the words "receipt" and "invoice" interchangeably when describing what documentation to submit in order to be reimbursed for your FSA.
posted by rada at 1:50 PM on December 19, 2014 [1 favorite]

nthing that at my company we don't generally issue receipts per se - we will send an invoice marked paid and showing a zero balance.
posted by brilliantine at 2:02 PM on December 19, 2014

However, in my law office, we do not (generally) issue "receipts" for payments; we only invoice. On our invoices it indicates that we received payment, and those credits are applied to the outstanding amount, but the document is still an "invoice." Therefore, if you ask for a receipt, I will give you an invoice, but with a zero balance.

This has been my experience also, specifically working within the travel industry in the German market. Company books a trip charged to credit card, but travel office still issues an invoice, which company needs for accounting (tax? VAT?) purposes. This is technically called a"Nullrechnung" = zero (balance) invoice, but people simply call it Rechnung (invoice) in everyday parlance.
posted by ClarissaWAM at 2:03 PM on December 19, 2014 [1 favorite]

Response by poster: OP Here: to clarify, the information is identical on both documents, and itemized. Of course, they don't *get* both documents if they pay immediately, just the receipt. However, the questions don't ask for "extra information" not shown on the receipt; they ask for an invoice.

In some rare cases I've been asked for extra information is when people from outside the U.S. want "an invoice, with this string of numbers on it, which is my tax ID"--they usually accept a receipt with the string of numbers on it in that case. But this is a tiny minority of sch questions.

However I do sometimes get people outside the U.S. saying "I need an invoice for tax purposes"--so I'm wondering if I need to keep an eye out for this regarding certain countries? It sounds like that may be the case in Spanish-speaking countries.
posted by Hypatia at 2:13 PM on December 19, 2014 [1 favorite]

Here in Australia, I have worked for two large organisations, and both require us, for reimbursement of expenses, to provide a "tax invoice". The first time this happened, I was baffled. I pointed out that I bought the item (lunch!) at a cafe, and paid immediately. It's not like they were going to invoice me. But the admin person told me that a "tax invoice" is just another word for receipt, but it's the type of receipt they need, and the only difference is that it will say "tax invoice" on the top.

It is indeed true that everywhere I've asked for receipts in Australia has been able to provide me with one of those at the push of the button, if I ask.

I don't know if the admin person I talked to was correct about a tax invoice being just another type of receipt, but it seems a lot of people believe so. (And most people seem to abbreviate tax invoice just to invoice, so it's possible there's a difference between tax invoice and invoice that gets lost in that abbreviation.)
posted by lollusc at 4:08 PM on December 19, 2014

I know at least in Brazil that there is a term (nota fiscal) that is usually translated as "invoice" and a term (recibo) that is usually translated as "receipt" and that for tax law reasons that I don't entirely (or really even partially) understand, there are times when a nota fiscal and not a recibo is required. Here's somewhat of an explanation, if you're curious--Brazilian tax law is just a nightmare, really.

In Spanish you run into the same issue with factura (nominally "invoice") vs. recibo ("receipt"), with the former having legal validity for tax purposes in many countries and the latter being insufficient for tax purposes.
posted by drlith at 4:13 PM on December 19, 2014 [1 favorite]

When I was in China, there were three similar things. An invoice and a receipt, like you said, and a third that I kind of think of as a receipt but isn't. It states what is bought, who paid, and gets an official stamp. This is what you need to get reimbursements or claim it on taxes, but is not the same as a receipt.

I guess it's the same as the "tax invoice" that lollusc is talking about.
posted by ethidda at 4:37 PM on December 19, 2014

Here in Australia, I have worked for two large organisations, and both require us, for reimbursement of expenses, to provide a "tax invoice".

Yes, it has to do with the GST (goods and services tax, like the VAT). Businesses selling things subject to the GST have to issue a "tax invoice", and there's rules about what information that that document has to contain, and IIRC it has to be labelled as a "tax invoice". The main thing is that it has to show how much of the total amount payable is GST. Sometimes you can claim back the GST you paid (something to do with the GST only being paid by the final consumer, not a middle man) and so businesses definitely need to have this info.

Anyway, places like supermarkets where you pay immediately are not going to issue a tax invoice immediately before you pay, and then a receipt after, so they just issue the one document - the receipt, which is also the tax invoice for the purposes of the GST laws. And so yes, in most contexts in Australia, the tax invoice is the receipt.
posted by pianissimo at 4:43 PM on December 19, 2014 [2 favorites]

I have provided services (in the US) with organizations - usually schools and other government bodies - who need both an invoice and a reciept in order to check all their accounting boxes. It's not that they're confusing the two, it's that their fair-bidding system, purchase-order system, or whatever, requires an invoice and a proof of payment.
posted by Miko at 6:21 PM on December 19, 2014

If I dealt with this kind of person, for an item for which payment has already been made, I would simply send (or resend) an invoice AND a receipt, and would not think any more about it.
posted by megatherium at 8:50 PM on December 19, 2014 [2 favorites]

I had requests like this from overseas customers at a company I used to work at - the customers apparently needed an invoice for tax purposes, although they'd made their purchase by credit card, which meant our system generated a receipt rather than an invoice.
My workaround was to include a memo on the receipt that said "This receipt serves as an invoice for tax purposes". I have no idea if it carried any legal weight, but it seemed to suffice.
posted by zombiedance at 8:54 PM on December 19, 2014 [1 favorite]

In the US, an invoice will typically include the vendor's employer ID or taxpayer ID number, whereas a receipt will not. Companies need this data if they are ever subject to a use-tax audit by their state and for certain vendors (professional service providers, and foreign companies) they are required to make filings to the IRS disclosing the amounts paid and the taxpayer ID of the payee. As a result, many accounts payable systems are hard-wired to require an "invoice" at all times to make sure the relevant data are always received and captured.
posted by MattD at 5:13 AM on December 20, 2014

Oh, and another thing that invoices customarily state, and receipts do not, is the customer's own purchase order number. That's a KEY piece of data for any large procurement organization, as their purchase order, rather than the vendor's invoice number, is how they track budgets, controls, margin, inventory, etc.
posted by MattD at 5:15 AM on December 20, 2014 [1 favorite]

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