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Quotation, purchase order, invoice, receipt: the paper trail of a sale
Short answer: The usual order is quotation (the seller offers a price), purchase order (the buyer confirms the order), invoice (the seller asks for payment), then receipt (the seller confirms payment).
The four papers in order
- Quotation. Sent by the seller. "I can supply this for this price." It is an offer, not a demand for money.
- Purchase order. Sent by the buyer. "Yes, send me this." It confirms what and how much is ordered.
- Invoice. Sent by the seller after delivery or at sale. "Please pay this amount by this date."
- Receipt. Sent by the seller after payment. "We received your money." This is your proof.
Which steps can you skip?
- A shop sale paid on the spot: one bill that shows the payment is enough.
- A small repeat order: you can skip the quotation and the purchase order and start from an invoice.
- Credit sales (Udharo): never skip the invoice, and always give a receipt when the money arrives.
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Questions
Is a quotation the same as an invoice?
No. A quotation is a price offer before the sale. An invoice asks for payment for a sale that has happened.
Who issues a purchase order?
The buyer. It tells the seller exactly what to supply.
Which paper proves I paid?
The receipt. Keep it with your records.