Reference
Invoicing glossary
The terms that show up on invoices, in contracts and in AP emails — in plain English, with links to the guide that explains the practical part.
Documents
Invoice
A request for payment for goods or services, with a unique number, an issue date and a due date. The invoice is the document that creates the receivable. See how to write an invoice.
Quote / estimate
A price for work before it starts. A quote is usually a fixed offer; an estimate is approximate and can change. See the blank quote template.
Proforma invoice
Confirms an order and the terms before shipment. It looks like an invoice but is not a tax invoice and does not replace the commercial invoice. See proforma vs invoice.
Commercial invoice
The invoice used in an export shipment, showing the sale between buyer and seller. Customs may use it to value the goods. See invoicing international clients.
Credit note
A document that reduces the amount a customer owes, without editing the original invoice. It references the invoice it corrects. See the blank credit note template.
Receipt
Proof that a payment was made. A receipt is not a request for payment; an invoice is.
Purchase order (PO)
The buyer’s written order to a supplier. The PO number on the invoice lets accounts payable match the order, the delivery and the bill. See the blank purchase order template.
Work order
Authorizes a specific service job at a site, with the scope and the price the customer is approving. See what goes on a work order.
Delivery note
Proof of what was handed over, usually without prices, signed by the receiver. See delivery note vs packing slip.
Packing slip
A list of what is in a shipment. It may show prices and order details; a delivery note is the signed proof of delivery.
Statement of account
A summary of every open invoice and the total balance. It is not a new invoice. See statement of account guide.
Timesheet
A record of hours worked by task or day, used to support an hourly invoice. See how to bill hourly work.
Expense report
A request to reimburse costs, grouped by category and backed by receipts. See expense reports for freelancers.
Retainer
A recurring fee for ongoing access or capacity, often billed monthly. It is not the same as a deposit. See deposit vs retainer vs milestone.
Money and tax
Subtotal
The sum of the line items before any discount or tax.
Discount
A reduction from the subtotal, usually shown before tax so the tax is calculated on the discounted amount.
Sales tax
A state and local tax on taxable sales. There is no federal sales tax in the US. See sales tax nexus for freelancers.
VAT / GST
Consumption taxes used in many countries outside the US. A US invoice to a foreign client may need a note about VAT or GST rather than a US-style tax line.
Nexus
The connection to a state that can require you to collect sales tax — physical presence, economic thresholds, or both.
Resale certificate
A document a business buyer provides to buy goods for resale without paying sales tax. Keep it on file. See the e-commerce invoice sample.
W-9
A form that gives a client your legal name, address and taxpayer identification number. It is separate from the invoice. See W-9 vs 1099-NEC.
1099-NEC
The form a business files to report nonemployee compensation paid to a contractor. The client files it; you receive a copy.
EIN
Employer Identification Number. A sole proprietor can use an EIN instead of an SSN on a W-9.
Net 30
Payment due 30 days after the invoice date. Net 15 and Net 60 work the same way. See payment terms.
Due date
The calendar date payment is due. “Net 30” is a term; the due date is the date the client can put in their calendar.
Late fee
A charge for paying after the due date, enforceable only if it was agreed in the contract and allowed by state law. See late payment reminders.
Deposit
Part of the project price paid up front. Show the full total, then the amount paid and the balance. See deposits and retainers.
Milestone billing
Payments tied to phases or deliverables, such as 30% at kickoff and 40% at approval.
Retainage
A percentage of each payment held back until a construction or service job is complete. Rules vary by state and contract.
Aging
Grouping receivables by how long they are overdue — current, 1–30, 31–60, 61–90, over 90 days.
Getting paid
Remittance
The payment itself, plus the information that tells the seller which invoice it pays. Put the invoice number in the memo.
PO number
The buyer’s reference number for an order. Missing or mismatched PO numbers are a common reason an invoice sits unpaid.
Dunning
The sequence of reminders sent when an invoice is overdue. Keep it factual and specific. See the late payment guide above.
Chargeback
A card payment reversed by the customer’s bank. Keep delivery proof and client communications if you accept cards.
Collections
Using a third party to recover an unpaid debt, usually for a percentage of what is recovered. See when a client will not pay.
Lien
A legal claim on property for unpaid work, used in construction. The rules and deadlines are state-specific.
Small claims
A simplified court process for smaller money disputes, with limits and procedures that vary by state.
Write-off
Removing an invoice from receivables because you no longer expect to collect it. Keep the record; the debt may still be collectible.
Bad debt
An invoice you have written off as uncollectible. Tax treatment depends on your accounting method and the rules.
Reconciliation
Matching invoices, payments and bank records so the balance in your ledger matches reality.
Where to go next
The guides hub groups the practical guides by topic. The templates library has blank PDFs and filled samples, and the documents hub links all ten generators.