What Is an Invoice? Definition, Types & Examples (2026)

An invoice is a document a seller sends to a buyer that itemises a transaction and requests payment for goods or services provided. In simple terms, it's a formal bill: it says what was delivered, how much is owed, and when payment is due. Invoices are the backbone of business record-keeping and the main way companies track money owed to them.

What is an invoice used for?

An invoice does several jobs at once. It requests payment, creates a legal record of a sale, helps both parties track what's owed, and provides the documentation needed for accounting and tax. Without invoices, businesses would have no reliable way to chase payments or prove their income.

• Requesting payment from a customer
• Recording a sale for your accounts
• Tracking which payments are outstanding
• Supporting tax returns and audits
• Providing proof of a transaction if a dispute arises

What must an invoice include?

While the exact requirements vary by country, almost every valid invoice contains the same core elements:

1. 1The word 'Invoice' and a unique invoice number
2. 2Your business name, address, and contact details
3. 3The customer's name and details
4. 4The invoice date and the payment due date
5. 5An itemised list of goods or services with quantities and prices
6. 6Any tax (VAT, GST, sales tax) shown separately
7. 7The total amount due and accepted payment methods

Types of invoices

Different situations call for different invoices. The most common types are:

• Standard invoice — the everyday invoice requesting payment for a sale.
• Proforma invoice — a preliminary estimate sent before a sale is finalised.
• Commercial invoice — used in international trade for customs.
• Recurring invoice — sent on a regular schedule for ongoing services.
• Credit note — issued to reduce or refund a previous invoice.
• Timesheet/hourly invoice — bills based on hours worked.

Invoice vs bill vs receipt

These three are often confused. An invoice requests payment before it's made. A 'bill' is essentially the same thing in casual language — what the customer calls the invoice they receive. A receipt is different: it's issued after payment to confirm the money was received. See our invoice vs receipt guide for the full breakdown.