Invoice.
In plain English
An invoice is a document a business sends to a customer to request payment for goods or services delivered. It lists what was provided, the quantity and price, the total amount owed, the due date, and how to pay. An invoice is a formal record of a sale, which is why it matters for bookkeeping and taxes on both sides. Once sent and unpaid, an invoice becomes part of the seller's accounts receivable (money owed to them) and the buyer's accounts payable (money they owe).
01Why it matters
Clear invoices with firm due dates are how small businesses actually get paid on time, and they are your paper trail if a customer disputes a charge or never pays.
02The math, step by step
A freelance writer finishes a project and sends an invoice listing '4 articles at $300 each, total $1,200, due in 30 days,' with bank transfer details. Until the client pays, that $1,200 sits in the writer's accounts receivable.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
An invoice is a request for payment sent before the customer pays. A receipt is proof of payment given after the customer has paid.
Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice