Invoice vs Receipt vs Purchase Order vs Pro Forma: What is the Difference? EXPLAINED!

Invoice vs Receipt vs Purchase Order vs Pro Forma: What is the Difference? EXPLAINED!

Posted by Big Brand on 29th Feb 2020

Is your head spinning from all the terminology?  Don't worry! We will make this super simple for you!  Let’s say you want to buy 100 cases of peppermint gum. You then contact a company online and ask for a quote. The company responds with a PRO FORMA INVOICE.

A Pro Forma invoice used BEFORE the merchandise is paid for whereas an Invoice is used AFTER payment has been made. Pro Forma is used in situations where the wholesaler cannot yet predict what the exact order total will be. So since the wholesaler doesn’t have 100 cases of peppermint gum in stock today, they provide the Pro Forma to let you know it is going to cost between $3,000 - $3,500 for the cases. This estimate gives you an opportunity to evaluate the price before purchasing. (Learn more about Pro Forma vs Invoices)

When the wholesaler finally gets the gum, the price ends up being $3,100. You think this is a great price so you decide you want to go through with the deal. You create a Purchase Order for the 100 cases. The purchase order states that you are agreeing to purchase 100 cases Bubble-Bubble Peppermint Gum for $3,100. The purchase order also says where the wholesaler will be shipping your gum as well as other info.  (Learn more about Purchase Orders and how to make one)

You now place the order through the companies website. As soon as you order you are sent an eMail Order Confirmation.

An order confirmation is a type of instant receipt. Most websites, in general, will instantly send you an emailed receipt as soon as you order. This is an "Order Confirmation". This email is to let you know that you have successfully placed an order. An Order Confirmation basically says “Hey! We received your order!”. Most order confirmations will also say the amount you were charged and what payment method you used (for example: bank wire or credit card, pay pal, etc)

Now that the order has been finalized, an Invoice is made available by the wholesaler.

An invoice is what a company, like ours provides. It's typically a full sheet of paper (or even multiple sheets of paper) that can be printed on 8.5 x 11" printer paper. This is what an invoice looks like. An invoice is usually available in your account online or, some sellers, include a printed copy of the invoice in the shipment. An invoice basically says “Here’s all of the details of our transaction”. The invoice is the official document of the transaction.

While you are waiting for the 100 cases to arrive you completely sell out of the current stock of gum you have. So you rush to CVS and buy all of their Bubble-Bubble Peppermint gum for 75-cents per pack. The CVS cashier hands you a receipt that is 348 feet long. 

The receipt is so long that it barely fits in your vehicle, because apparently this is what CVS likes to do. .

The CVS receipt is not an invoice because it does not contain your company information, logo, etc. It is just a needlessly-long piece of paper for your record of payment. 

One AMAZING thing about is we stock 100% of the merchandise we sell.  We never need to provide Pro Forma invoices because we know the exact price BEFORE you order. 

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