An invoice is a document a seller sends to a buyer to request payment for goods or services that have been provided. It lists what was sold, how much it costs, and when and how the buyer should pay. For freelancers and small businesses, the invoice is the formal step that turns finished work into money in the bank.

What is the purpose of an invoice?

An invoice does three jobs at once:

  • It requests payment. It tells the client exactly how much they owe and by when.
  • It creates a record. Both sides keep a copy for bookkeeping, tax returns and audits.
  • It prevents disputes. Itemized prices, dates and payment terms leave little room for confusion.

What does an invoice include?

A professional invoice usually contains:

  • The word “Invoice” and a unique invoice number
  • Your business name, logo and contact details
  • Your client's name and address
  • The invoice date and due date
  • An itemized list of products or services with quantity, rate and amount
  • Subtotal, any discount, tax (such as VAT, GST or sales tax) and the total due
  • Payment instructions and payment terms

For a full checklist, see what should every invoice include.

A simple invoice example

Imagine a web designer who builds a website for a local bakery. Their invoice might show:

  • Invoice #1001 — issued 10 October, due 24 October
  • Website design — 1 × $500 = $500
  • Development — 1 × $800 = $800
  • Maintenance — 3 months × $100 = $300
  • Subtotal $1,600, tax 15% $240, total $1,840
  • Payment by bank transfer within 14 days

Common types of invoice

  • Standard or sales invoice — the everyday invoice for goods or services.
  • Tax invoice — an invoice that meets local VAT or GST rules. Read VAT and GST invoices explained.
  • Proforma invoice — a preliminary invoice sent before work or delivery, often for approval or customs.
  • Recurring invoice — the same invoice sent on a regular schedule. See our recurring invoices guide.
  • Credit note — a document that reduces or cancels an earlier invoice. Learn how a credit note corrects an invoice.

Invoice vs receipt vs estimate

An estimate or quote is sent before the work to propose a price. An invoice is sent after (or during) the work to request payment. A receipt is sent after payment to confirm it was received. Our guides on invoice vs receipt and quotes, estimates and invoices go into more detail.

How to create an invoice

You can build an invoice in a word processor, but the quickest way is an online invoice generator. Fill in your details, add your items, and the totals are calculated for you before you download the invoice as a PDF. Follow our step-by-step guide on how to write an invoice to get started.