What is an invoice
An invoice is a document that proves a product has been sold or a service provided, showing its price, the applicable taxes, and the identity of the seller and the buyer. Unlike a quote, an invoice has legal and tax value: it's the record used to declare income and expenses.
What an invoice is for
An invoice serves three main purposes: it's proof that a sale or service took place, it's used to claim or justify a payment, and it's the document used to declare taxes (VAT and income tax, for freelancers and businesses).
What's the difference between an invoice and a quote
A quote is a price proposal made before the work is carried out; it has no tax value and the client may or may not accept it. An invoice, on the other hand, is issued after (or at the same time as) the service is delivered, and it does create tax obligations. See the full comparison in differences between invoice, quote, receipt and delivery note.
Information an invoice must include
Every invoice must include, at a minimum:
- The issuer's tax details (name, tax ID, address).
- The client's details.
- A sequential invoice number and issue date.
- A description of the products or services, quantity and price.
- The VAT rate applied and the total amount.
You can find the full list in what information must an invoice include.
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