Sales receipt vs invoice in QuickBooks Online: which to use
Short answerUse a sales receipt when the customer pays at the time of the sale, and an invoice when they'll pay later. An invoice creates accounts receivable (money the customer owes you) until it's paid; a sales receipt doesn't, because nothing is owed.
The difference at a glance
| Sales receipt | Invoice | |
|---|---|---|
| Use it when | The customer pays now | The customer pays later |
| Income recorded | Now | Now, when the invoice is created |
| Customer owes you | Nothing | The invoice total, until they pay |
| Money goes to | Undeposited Funds (or straight to the bank) | Nowhere yet: accounts receivable goes up |
| What happens next | Nothing, or a bank deposit | Receive payment when the customer pays |
| Journal entry | Debit Undeposited Funds or Checking, credit Sales | Debit Accounts receivable, credit Sales |
Examples
- A customer buys three pastry boxes at the counter and taps a card: sales receipt.
- A business orders catering for next Friday and will pay within 15 days: invoice.
- A customer pays a $240 invoice you sent last month: neither. Use Receive payment against the existing invoice.
Mistakes to avoid
- Creating a sales receipt when an invoice is paid. This records the income a second time, and the invoice still shows as unpaid. Use Receive payment instead.
- Creating an invoice for a sale that's already paid. The customer appears to owe money they don't. If you've done this, receive payment against it right away, or delete it and record a sales receipt.
- Choosing the wrong deposit account. If you'll take several payments to the bank together, use Undeposited Funds, so the bank deposit matches your bank statement.
Common questions
Does a sales receipt affect accounts receivable?
No. A sales receipt is for a sale that's already paid, so nothing is owed and accounts receivable doesn't change.
Is an invoice income before it's paid?
Yes, on the accrual basis that most businesses use in QuickBooks: income is counted when the invoice is created. On the cash basis, it's counted when the payment arrives.
Related guides
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