An invoice is a request for payment, issued before the money moves, and it creates a debt. A receipt is proof that payment was made, issued after. Both come from the seller, and the same transaction normally produces one of each. Under the Australian Consumer Law you must give a customer proof of transaction for anything costing $75 or more excluding GST, and for smaller sales you must provide one within seven days if they ask.
Side by side
| Invoice | Receipt | |
|---|---|---|
| Purpose | Requests payment | Confirms payment was made |
| Timing | Before payment | After payment |
| Issued by | The seller | The seller |
| Legal effect | Creates a debt the customer owes | Discharges it, in whole or in part |
| Shows a due date | Yes — payment terms run from the issue date | No — the transaction is finished |
| Used to claim a GST credit | Yes, if it is a valid tax invoice | Only if it carries every element a tax invoice needs |
| Required by law | No general requirement to issue one | Yes — proof of transaction for sales of $75 or more excluding GST |
What Australian law actually requires
The obligation is a consumer law obligation, not a tax one, and it applies to the supplier:
- $75 or more, excluding GST — you must give the customer proof of transaction, and you must do it as soon as practicable after the sale.
- Under $75 — you must provide one within seven days if the customer asks for it.
- What counts as proof of transaction — a tax invoice, a cash register receipt, a credit card or EFTPOS statement, a handwritten receipt, or a lay-by agreement. It has to show your identity and ABN, the date, what was supplied, the price, and the GST if any.
- Itemised bill — for services, a customer can ask for an itemised bill showing how the price was calculated, and you have seven days to provide it free of charge.
Note that these thresholds sit in the consumer law, so they use $75 excluding GST. The GST rules use a different figure — $82.50 including GST — for when a buyer needs a tax invoice to claim a credit. The two numbers describe the same price from different sides, which is why they look inconsistent and are not.
Which one do I need to claim a deduction?
For your own tax, what you need is a record that shows who you paid, what for, how much and when. A tax invoice is the strongest form of that; a receipt or bank statement entry can be enough for smaller items, but a bank line alone rarely shows what was bought.
For GST credits the rule is stricter. To claim a GST credit on a purchase over $82.50 including GST, you need a valid tax invoice from the supplier. A plain receipt qualifies only if it carries everything a tax invoice must carry — which most retail EFTPOS dockets from GST-registered businesses do, and most handwritten receipts do not. Details of what those elements are sit on how to invoice with GST.
Is a paid invoice a receipt?
In practice, mostly yes — an invoice marked PAID with the date and method of payment is widely accepted as proof of transaction, and it is what most small businesses issue. It works because it carries everything a receipt needs plus the confirmation that the money arrived.
Two situations where it is not enough:
- Part payment. An invoice stamped paid when only a deposit has been received is misleading. Issue a receipt for the amount actually received and leave the invoice showing the balance.
- The customer explicitly asks for a receipt. Some employers and insurers will not accept a marked-up invoice. Issuing a separate one-line receipt costs nothing.
Where the other documents fit
Invoice and receipt are two points on a longer sequence. In a normal business-to-business sale the order runs:
- Quote — you offer to do the work at a price. Nothing is owed.
- Purchase order — the customer commits to buy, and gives you a PO number to quote back.
- Proforma invoice — optional, where you want payment or a deposit before you start.
- Invoice — you have supplied; this is the debt.
- Remittance advice — the customer tells you which invoices their payment covers.
- Receipt — you confirm the money arrived.
- Credit note — if any of it later has to be reversed.
Keeping both
Keep invoices you issued, invoices you received, and receipts for anything you intend to claim, for five years. Photographs and PDFs are acceptable to the ATO provided they are complete and legible — which matters, because thermal till receipts fade to blank inside a year. Snap them on the day and let the paper go.
This is exactly what Balaana's expenses feature is for, and it is on the free plan.
Related reading
- What is an invoice? — what goes on one and how to number them
- How to invoice with GST — the seven elements of a tax invoice
- Sole trader tax deductions — what the records are ultimately for
- What is a remittance advice? — the document between the two
Frequently asked questions
No. An invoice is issued before payment and asks for money; a receipt is issued after and confirms it was received. The same sale usually produces both. An invoice marked PAID with the date is accepted as proof of transaction in most situations, but it is not the right document when only part of the amount has been paid.
Yes, for any sale of $75 or more excluding GST — the Australian Consumer Law requires proof of transaction as soon as practicable after the sale. Below $75 you must supply one within seven days if the customer asks. A customer buying services can also ask for an itemised bill, which you must provide free within seven days.
Usually yes for the deduction itself, provided the receipt shows the supplier, the date, what was bought and the amount. Claiming the GST credit is stricter: for a purchase over $82.50 including GST you need a valid tax invoice, and a receipt only counts if it contains everything a tax invoice must contain.
A tax invoice is a GST document with seven required elements, issued by a GST-registered supplier. A receipt is proof that payment was made. Many documents are both — a retail EFTPOS docket from a GST-registered business usually satisfies the tax invoice requirements as well. A handwritten receipt generally does not.
Five years, from the date the record was prepared or obtained or the transaction was completed, whichever is latest. Digital copies are acceptable to the ATO as long as they are complete and legible, so photograph thermal till receipts the day you get them — they fade to blank well inside the five years.
Sources
Proof-of-transaction and itemised-bill obligations come from the Australian Consumer Law, as explained by the ACCC; tax invoice and GST credit rules and the five-year retention rule from the ATO. Confirm the current position with those sources or a registered tax agent. Balaana is bookkeeping software, not a tax agent — this article is general information, not personal tax advice.