Three documents, each with a specific job, and enough overlap in what they contain that new business owners often use them interchangeably — which usually causes confusion for whoever's on the other end.
| Document | When it's sent | What it means |
|---|---|---|
| Quotation | Before work starts | "Here's what this will cost if you say yes" |
| Invoice | After work is done, before payment | "Here's what you owe, and by when" |
| Receipt | After payment is received | "Confirmed — this has been paid" |
The natural sequence
Quote, then invoice, then receipt — in that order, for a typical project-based transaction. Retail purchases usually skip the first two entirely, since payment happens at the point of sale and the receipt is the only document needed.
Where people mix them up
Calling an invoice a "receipt" before payment has actually happened is a common slip that can confuse a client about whether they've already paid or still owe money. Keep the wording matched to the actual stage of the transaction.
Can one document do two jobs?
At a retail counter, yes — the printed slip at checkout functions as both invoice and receipt since payment is instant. For anything with a payment delay (invoiced work, deposits), the two need to stay separate documents.
Why the distinction actually matters for your records
Invoices track what's owed to you; receipts track what's actually been collected. Treating them as interchangeable makes it much harder to see your real accounts receivable at a glance.