Glossary · Sales and receivables
Invoice
An invoice is a document a business sends a customer asking to be paid for goods or services already delivered. It lists what was sold, the price, any tax, the total and the payment terms. Recording it creates an amount the customer owes, in accounts receivable, and income in the books.
Glossary / Invoice · Also called Sales invoice, Bill to a customer
How it works
An invoice is the point where a sale becomes a debt. Under accrual accounting the income counts on the invoice date, not when the money arrives. The unpaid amount sits in accounts receivable until the customer pays.
A good invoice has a unique number, the invoice date, the customer's name and address, a line for each item or service, the tax shown separately, the total, and terms such as Net 30 that set the due date. Many businesses also add a purchase order number or job reference the customer asked for.
An invoice is different from a sales receipt. A sales receipt records a sale paid on the spot, so nothing is owed. An invoice expects payment later.
Worked example: A landscaping invoice on Net 30 terms
A landscaper invoices a customer on March 3 for spring cleanup. The terms are Net 30, so the invoice is due on April 2.
When the invoice is saved, accounts receivable goes up by $1,130.00, income goes up by $1,000.00, and sales tax payable goes up by $130.00. When the customer pays, cash goes up and receivables come back down. Income does not change again.
| Line | Amount |
|---|---|
| Spring cleanup, 8 hours at $95 | $760.00 |
| Mulch, 4 yards at $60 | $240.00 |
| Subtotal | $1,000.00 |
| Sales tax at 13% | $130.00 |
| Total due April 2 | $1,130.00 |
In the US and in Canada
In the United States
There is no federal rule on what an invoice must show. Sales tax, where charged, is set by the state and local rates that apply to the sale.
In Canada
Once you are registered for GST/HST, the CRA requires certain details on invoices before your customer can claim an input tax credit, such as your GST/HST registration number on sales of $100 or more. The required details grow with the amount of the sale.
In AcboBooks
In AcboBooks, an invoice posts to accounts receivable and income when saved. It can carry your logo and colours, payment terms with an early-payment discount, custom fields, and a card payment link through your own Stripe account. It saves as PDF or prints, and can be edited in place unless it falls in a closed period.
Related terms
Related on this site
Sources
- CRA GST/HST Memorandum 8.4, Documentary requirements for claiming input tax credits
- Input Tax Credit Information (GST/HST) Regulations
Updated October 25, 2026. General information, not tax, legal or accounting advice. Rules and rates change; check with the IRS, the CRA, your state or province, or your accountant.
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