The Core Difference
The main difference is timing.
- Invoice: A request for payment before the money is received. It lists what is owed.
- Receipt: A proof of payment after the money has been received. It confirms the transaction is closed.
When to Issue an Invoice
Issue an invoice when you have completed the work (or delivered goods) but haven't been paid yet. This is standard for service businesses like freelancers, agencies, and wholesalers offering credit terms (e.g., Net 30).
When to Issue a Receipt
Issue a receipt immediately after the client pays you. If they paid cash, via bank transfer, or online, the receipt is their proof of purchase.
Note: on Aurex, when you mark an invoice as "Paid", the system automatically generates a receipt for your client.
Why You Need Both for Taxes
For accurate bookkeeping and FBR compliance, you need to track both "Accounts Receivable" (Invoices sent) and actual "Revenue" (Receipts/Payments collected).