An invoice, bill or tab is a commercial document issued by a seller to a buyer relating to a sale transaction and indicating the products, quantities, and agreed-upon prices for products or services the seller had provided the buyer.[1]

Payment terms are usually stated on the invoice. These may specify that the buyer has a maximum number of days to pay and is sometimes offered a discount if paid before the due date. The buyer could have already paid for the products or services listed on the invoice. To avoid confusion and consequent unnecessary communications from buyer to seller, some sellers clearly state in large and capital letters on an invoice whether it has already been paid.

From a seller's point of view, an invoice is a sales invoice. From a buyer's point of view, an invoice is a purchase invoice. The document indicates the buyer and seller, but the term invoice indicates money is owed or owing.

Within the European Union, an invoice is primarily legally defined by the EU VAT directive as an accounting voucher (to verify tax and VAT reporting) and secondly as a Civil law (common law) document.

An invoice should not be mixed up with Proforma Invoice that indicates commitment, intention, or prepayment request.


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Invoices appear as one of the very earliest manifestations of written records in ancient Mesopotamia.[2]


Company Name
123 Fake Street

Invoice No
Description Amount Owed:
Invoice Total [Currency]

A typical invoice may contain:[3][4]

In countries where wire transfer is the preferred method of settling debts, the printed bill will contain the bank account number of the creditor and usually a reference code to be passed along with the transaction identifying the payer.

The US Defense Logistics Agency requires an employer identification number on invoices.[5]

The European Union requires a VAT (value-added tax) identification number for official VAT invoices, which all VAT-registered businesses are required to issue to their customers. In the UK, this number may be omitted on invoices if the words "this is not a VAT invoice" are present on the invoice. Such an invoice is called a pro-forma invoice, and is not an adequate substitute for a full VAT invoice for VAT-registered customers.[6]

In Canada, the registration number for GST purposes must be furnished for all supplies over $30 made by a registered supplier in order to claim input tax credits.[7]

Recommendations about invoices used in international trade are also provided by the UNECE Committee on Trade, which involves a more detailed description of the logistics aspect of merchandise and, therefore may be convenient for international logistics and customs procedures.[8]

European Union

EU VAT union invoice definition

Within the European Union Value Added Tax directive,[9] Article 226 gives a concise definition of invoices within the European Union's member-states.

Without prejudice to the particular provisions laid down in this Directive, only the following details are required for VAT purposes on invoices issued pursuant to Articles 220 and 221:

  1. the date of issue;
  2. a sequential number, based on one or more series, which uniquely identifies the invoice;
  3. the VAT identification number referred to in Article 214 under which the taxable person supplied the goods or services;
  4. the customer's VAT identification number, as referred to in Article 214, under which the customer received a supply of goods or services in respect of which he is liable for payment of VAT, or received a supply of goods as referred to in Article 138;
  5. the full name and address of the taxable person and of the customer;
  6. the quantity and nature of the goods supplied or the extent and nature of the services rendered;
  7. the date on which the supply of goods or services was made or completed or the date on which the payment on account referred to in points (4) and (5) of Article 220 was made, in so far as that date can be determined and differs from the date of issue of the invoice;
    1. where the VAT becomes chargeable at the time when the payment is received in accordance with Article 66(b) and the right of deduction arises at the time the deductible tax becomes chargeable, the mention ‘cash accounting’;
  8. the taxable amount per rate or exemption, the unit price exclusive of VAT and any discounts or rebates if they are not included in the unit price;
  9. the VAT rate applied;
  10. the VAT amount payable, except where a special arrangement is applied under which, in accordance with this Directive, such a detail is excluded;
    1. where the customer receiving the supply issues the invoice (instead of the supplier) the mention 'self-billing';
  11. in the case of an exemption, reference to the applicable provision of this Directive, or to the corresponding national provision, or any other reference indicating that the supply of goods or services is exempt;
    1. where the customer is liable for the payment of the VAT, the mention 'reverse charge';
  12. in the case of the supply of a new means of transport made in accordance with the conditions specified in Article 138(1) and (2)(a), the characteristics as identified in point (b) of Article 2(2);
  13. where the margin scheme for travel agents is applied, the mention 'margin scheme – travel agents';
  14. where one of the special arrangements applicable to second-hand goods, works of art, collectors' items and antiques is applied, the mention 'margin scheme – second-hand goods'; 'margin scheme – works of art' or 'margin scheme – collector's items and antiques' respectively;
  15. where the person liable for payment of VAT is a tax representative for the purposes of Article 204, the (VAT identification number, referred to in Article 214, of that tax representative, together with his full name and address.

EU VAT union receipt (simple invoice) definition

Article 226b of the EU VAT Directive is a concise definition of receipts within the EU member-states.

As regards simplified invoices issued pursuant to Article 220a and Article 221(1) and (2), Member States shall require at least the following details:

  1. the date of issue;
  2. identification of the taxable person supplying the goods or services (VAT identification number);
  3. identification of the type of goods or services supplied;
  4. the VAT amount payable or the information needed to calculate it;
  5. where the invoice issued is a document or message treated as an invoice pursuant to Article 219, specific and unambiguous reference to that initial invoice and the specific details which are being amended.

They may not require details on invoices other than those referred to in Articles 226, 227 and 230.

Australian Tax Office Tax invoice definition

Details about the Australian Tax Office (ATO) requirements for a tax invoice can be found on their website.[10][11]

For all GST purposes, a seller must issue a tax invoice to the buyer regardless of whether the sale involves cash or credit. Hence a tax invoice in Australia serves as an invoice as well as a receipt in the conventional sense. The words "paid" or "payable" differentiate meaning. The tax invoice must contain seven facts as per the GST Tax Law.


There are different types of invoices:


Some invoices are no longer paper-based, but rather transmitted electronically over the Internet. It is still common for electronic remittance or invoicing to be printed in order to maintain paper records. Standards for electronic invoicing vary widely from country to country. Electronic Data Interchange (EDI) standards such as the United Nation's EDIFACT standard include message encoding guidelines for electronic invoices. The EDIFACT is followed up in the UN/CEFACT ebXML syntax cross industry invoice.


The United Nations standard for electronic invoices ("INVOIC") includes standard codes for transmitting header information (common to the entire invoice) and codes for transmitting details for each of the line items (products or services). The "INVOIC" standard can also be used to transmit credit and debit memos.

In the European Union legislation was passed in 2010 in the form of directive 2010/45/EU to facilitate the growth of Electronic Invoicing across all its member states. This legislation caters for varying VAT and inter-country invoicing requirements within the EU, in addition to legislating for the authenticity and integrity of invoices being sent electronically. It is estimated that in 2011 alone roughly 5 million EU businesses will have sent Electronic Invoices.[18]

Open Application Group Integration Specification from OAGi

The XML message format for electronic invoices has been used since the inception of XML in 1998. Open Application Group Integration Specification (OAGIS) has included an invoice since 2001. The Open Applications Group (OAGi) has a working relationship with UN/CEFACT where OAGi and its members participate in defining many of the Technology and Methodology specifications. OAGi also includes support for these Technology and Methodology specifications within OAGIS.


This section needs to be updated. Please help update this article to reflect recent events or newly available information. (May 2019)

There are two XML-based standards currently being developed. One is the cross industry invoice under development by the United Nations standards body UN/CEFACT and the other is Universal Business Language (UBL) which is issued by Organization for the Advancement of Structured Information Standards (OASIS). Implementations of invoices based on UBL are common, most importantly in the public sector in Denmark as it was the first country where the use of UBL was mandated by law for all invoices in the public sector. Further implementations are underway in the Scandinavian countries as result of the North European Subset project. Implementations are also underway in Italy, Spain, and the Netherlands (UBL 2.0)[19] and with the European Commission itself.

The NES work has been transferred to European Committee for Standardization (CEN), the standards body of the European Union), workshop CEN/BII, for public procurement in Europe. The result of that work is PEPPOL. There UBL procurement documents are implemented between various European countries.

An agreement was made between UBL and UN/CEFACT for convergence of the two XML messages standards with the objective of merging the two standards into one before end of 2009, including the provision of an upgrade path for implementations started in either standard.


ISDOC is a standard that was developed in the Czech Republic as a universal format for electronic invoices. On 16 October 2008, 14 companies and the Czech government signed a declaration to use this format within one year in their products.


After implantation of the GST in India, concept of e-invoicing has been introduced for reporting of Business to Business (B2B) invoices for notified category of taxpayer. As of now,[when?] B2C invoices are exempt from e-invoicing.[20][21]


One-to-one relationship between the invoice and sender address and the invoice and between the recipient address. One-to-many relationship between the invoice and the single items.


Organizations purchasing goods and services usually have a process in place for approving payment of invoices based on an employee's confirmation that the goods or services have been received.[22][23][24][25]

Typically, when paying an invoice, a remittance advice will be sent to the supplier to inform them their invoice has been paid.


Invoices and receipts can technically be produced from the same book. Or computerised record system.

As a receipt where the customer has paid the complete bill could be called a zero balance invoice as there is $0.00 to pay.

And an invoice were there is money to pay will be called an invoice for Xx amount.

Invoice example.

       Sub Total $356.08
       Tax.       $23.73  
       Total     $379.81

If the customer then pays the invoice a new record in the same book is made for the payment. It will be entered as


Bringing the temporary customer account to zero. This record is the same as a receipt for payment. On a trade account one doesn’t always send the customer a receipt (after subsequent payment) this record is often done in the background in a computerised record system. (As the customer all ready has the invoice for their records.

Some receipts will be formatted

(receipt) Example; sub total $5.95

         Tax.      $0.39
         Total     $6.34
     Payment cash. $6.34
     Balance due.  $0.00

Invoice finance

Invoice credit is a line of business credit secured by customer invoices.

See also


  1. ^ "INVOICE Definition & Legal Meaning". Black's Law Dictionary (2nd ed.). 4 November 2011. Retrieved 10 March 2023.
  2. ^ McClellan III, James E.; Dorn, Harold (2006). Science and Technology in World History: An Introduction (2 ed.). Baltimore: The Johns Hopkins University Press. p. 47. ISBN 9780801883606. Retrieved 21 April 2020. The archaeological discovery of what amount to ancient Mesopotamian invoices — insignia sealed in clay — underscores the economic and utilitarian roots of writing and reckoning. Eighty-five percent of cuneiform tablets uncovered at Uruk (3000 BCE), for example, represent economic records, and Egyptian temple and palace records are similar.
  3. ^ Invoice illustration adapted from Meigs and Meigs Financial Accounting 4th Ed. (McGraw-Hill, 1970), p.190 ISBN 0-07-041534-X
  4. ^ Woodford, William; Wilson, Valerie; Freeman, Suellen; Freeman, John (2008). Accounting: A Practical Approach (2 ed.). Pearson Education. pp. 4–10. ISBN 978-0-409-32357-3.
  5. ^ US Defense Logistics Agency - Required information in invoices Archived 10 July 2007 at the Wayback Machine
  6. ^ Conn, Frances (15 August 2017). "VAT Invoice Essentials". Figure Weave Accountancy. Retrieved 12 May 2019.
  7. ^ Input Tax Credit Information (GST/HST) Regulations, SOR/91-45, at s. 3(b)(i)
  8. ^ Recommendation No. 06: Aligned Invoice Layout Key for International Trade (UN/CEFACT; 2000; 7 pages) ID: ECE/TRADE/148; Topic: Trade Facilitation and e-Business
  9. ^ Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax
  10. ^ Requirements of tax invoices
  11. ^ How to set out tax invoices and invoices "How to set out tax invoices and invoices | Australian Taxation Office". Archived from the original on 9 February 2015. Retrieved 18 January 2015.
  12. ^ DHL | Global | Customs Paperwork Archived 17 April 2015 at the Wayback Machine
  13. ^ ControlPay, Self-billing, accessed 26 April 2018
  14. ^ HMRC. "Self-billing and VAT".
  15. ^ Consolidated VAT Directive, 2006, Article 224
  16. ^ Notice 700/62 - Self-billing)
  17. ^ SCM | What is Evaluated Receipt Settlement?
  18. ^ The European Electronic Invoicing Experts Archived 11 January 2012 at the Wayback Machine
  19. ^ "Elektronisch factureren" (in Dutch). Government of the Netherlands. Archived from the original on 22 November 2011. Retrieved 5 January 2012.
  20. ^ "e invoice". Retrieved 30 October 2022.
  21. ^ "Dynamic QR". Retrieved 30 October 2022.
  22. ^ Michigan state Bureau of Transportation Invoice processing
  23. ^ US Department of the Navy Commercial Invoice Payments History System Archived 3 July 2007 at the Wayback Machine
  24. ^ Commercial Contracting Guidelines - US Defense Contract Management Agency Archived 26 June 2007 at the Wayback Machine
  25. ^ US Office of Federal Procurement Policy - Best Practices for Contract Administration Archived 12 June 2007 at the Wayback Machine