Bookkeeping Basics · Edmonton
Sales receipt vs invoice in QuickBooks: which one and when.
Two forms that both record a sale, but in very different ways. Pick the wrong one and you either double your income or leave invoices open forever.
By the Plum team- Updated Oct 2026
- 8 min read
- Customer paid at the time of sale? Use a sales receipt.
- Customer will pay later? Use an invoice, then record the payment when it arrives.
- Both record income and GST. Only the invoice creates accounts receivable.
- Never create both for the same sale, and never add the deposit as income too.
One of the first questions new QuickBooks users ask is sales receipt vs invoice: which one do I use? Both record a sale, both show up as income, and both can carry GST. The difference is timing: whether the customer has already paid.
Getting it right matters more than it looks. Using the wrong form is one of the most common reasons we see inflated income, phantom unpaid invoices and GST returns that don't tie out when we take over a file. This guide explains both forms, shows the entries behind them, and covers the mistakes to avoid.
1Sales receipt vs invoice: the core difference
| Sales receipt | Invoice | |
|---|---|---|
| When to use it | Paid in full at the time of sale | Paid later, on terms |
| Records income? | Yes | Yes |
| Records GST? | Yes | Yes |
| Creates accounts receivable? | No | Yes |
| Money goes to | Bank or Payments to deposit | Accounts receivable, until paid |
| Needs a second step? | No (apart from the deposit) | Yes: Receive payment |
| Typical users | Salons, studios, retail, market sellers | Consultants, trades, brokers, B2B |
A useful way to remember it: an invoice is a request for payment, and a sales receipt is proof of payment.
2A worked example: same trainer, two kinds of sale
Say you're a GST-registered personal trainer in Spruce Grove. In one week you have two sales.
Sale 1: a client pays at the session
A client pays $120 plus $6 GST by debit at the end of a session. Paid on the spot, so it's a sales receipt.
| Account | Debit | Credit |
|---|---|---|
| Payments to deposit (or Bank) | $126.00 | |
| Training income | $120.00 | |
| GST/HST payable | $6.00 | |
| Total | $126.00 | $126.00 |
One form, done. When the money reaches the bank, you match the deposit to this sales receipt.
Sale 2: a corporate wellness contract
A local company books a month of staff sessions for $1,800 plus $90 GST, payable Net 15. They haven't paid yet, so it's an invoice.
| Account | Debit | Credit |
|---|---|---|
| Accounts receivable | $1,890.00 | |
| Training income | $1,800.00 | |
| GST/HST payable | $90.00 | |
| Total | $1,890.00 | $1,890.00 |
Two weeks later the company pays by e-transfer. You record a payment against the invoice:
| Account | Debit | Credit |
|---|---|---|
| Bank (chequing) | $1,890.00 | |
| Accounts receivable | $1,890.00 | |
| Total | $1,890.00 | $1,890.00 |
Notice that across both sales, income is $1,920 and GST payable is $96. That's the right answer no matter which form you used. The forms only change the path the money takes. For more on the invoice path, see our guide to accounts receivable bookkeeping.
3Using each form in QuickBooks Online
Creating a sales receipt
- Click + New, then Sales receipt.
- Choose the customer (or a generic "Walk-in" customer if you don't track names), the date and the payment method.
- Add the product or service lines and the GST tax code.
- Pick where the money goes in the deposit-to field: Payments to deposit if it'll be banked with other payments, or the bank account if it lands on its own.
Creating an invoice
- Click + New, then Invoice. Choose the customer, terms and due date.
- Add lines and the GST tax code, then save and send.
- When the customer pays, click + New, then Receive payment, choose the customer and tick the invoice.
- Match the deposit in your bank feed to that payment.
Payments to deposit is the account QuickBooks used to call Undeposited Funds. If you're not sure how it works, our Undeposited Funds guide explains it with an example.
4Common mistakes with sales receipts and invoices
1. Creating both for one sale
Some people invoice a customer, then create a sales receipt when they pay. That records the income twice and leaves the invoice open. Use one form per sale: an invoice plus a payment, or a sales receipt on its own.
2. Invoicing everything out of habit
If every sale is an invoice but most are paid on the spot, you're doing two steps where one would do, and any payment you forget to apply leaves an invoice looking overdue. That makes your AR report useless for chasing real late payers.
3. Using a sales receipt for a deposit
A $500 deposit on a $3,000 job isn't a completed, fully paid sale. Recording it as a sales receipt books $500 of income before the work is done. Handle deposits through the invoice or a customer deposit account. Our post on customer deposits and unearned revenue shows how.
4. One sales receipt per transaction for high-volume businesses
A salon with 40 transactions a day doesn't need 40 sales receipts. If sales run through Square or another processor, a daily or per-payout summary is usually better, with the detail kept in the processor's reports. The key is that the summary splits sales, GST, tips and fees correctly.
5. Skipping the GST tax code
A sales receipt without a tax code puts the whole $126 into income. Your income is overstated by $6 and your GST return is understated by $6. Small per sale, large per year.
5Recording a daily sales summary instead
If your sales run through a point-of-sale system like Square, a single summary sales receipt (or journal entry) per day or per payout keeps QuickBooks tidy. Say a Callingwood barbershop's Saturday looks like this in the Square report: $1,400 in services, $70 GST, $210 in card tips paid out to staff through payroll, and $50.40 in processing fees, for a $1,629.60 payout.
| Account | Debit | Credit |
|---|---|---|
| Square clearing (or Bank) | $1,629.60 | |
| Merchant processing fees | $50.40 | |
| Service income | $1,400.00 | |
| GST/HST payable | $70.00 | |
| Tips payable to staff | $210.00 | |
| Total | $1,680.00 | $1,680.00 |
The payout then matches the deposit in the bank feed. Fees are illustrative; yours depend on your plan and card mix. Card processing fees are generally an exempt financial service, so there's no GST to claim on them. Integrations can post this for you, but check the first few weeks by hand, because a misconfigured integration is a common source of double-counted sales. The details are in our post on why Square deposits don't match sales.
6The Canadian tax side
For income tax, it doesn't matter which form you use as long as the sale is recorded once, in the right period. Sole proprietors report it on the T2125 and corporations on the T2. For GST, the 5% belongs in the reporting period of the sale or invoice. Exempt services (many health services, for example) shouldn't carry GST on either form, so set each product or service in QuickBooks with the correct default tax code.
CRA expects you to keep records that support your sales, including copies of invoices and sales receipts, for six years from the end of the tax year they relate to. QuickBooks keeps them for you, as long as your subscription is active. Export copies if you ever leave.
What about refunds?
Refunds mirror the original form. For a sale recorded on a sales receipt, issue a refund receipt (+ New, then Refund receipt), which reverses the income and the GST and records the money going back out. For an invoice that hasn't been paid, issue a credit memo instead and apply it to the invoice. Either way, the GST on the refunded amount comes back off what you owe CRA, so use the same tax code as the original sale.
Quick check before you savePlum sets up QuickBooks Online properly for trainers, salons, consultants and trades in Edmonton, Spruce Grove, St. Albert and Stony Plain, and fixes files where sales have been doubled. If your income looks too good to be true, book a call and we'll take a look.
7Questions people ask
What is the difference between a sales receipt and an invoice in QuickBooks?
An invoice records a sale the customer will pay later, so it creates accounts receivable. A sales receipt records a sale paid in full at the time, so the money goes straight to a bank account or Payments to deposit with no receivable.
Can I convert an invoice to a sales receipt in QuickBooks?
Not directly. If you created an invoice for a sale that was paid on the spot, the clean fix is to record a payment against the invoice dated the same day. The result in your books is the same as a sales receipt.
Should I use a sales receipt for a deposit or partial payment?
No. A sales receipt means the sale is fully paid. For a deposit on future work, record it against an invoice or as a customer deposit liability, depending on how your books are set up.
Do I need to create sales receipts if I use Square or Stripe?
Usually not one per sale. Most businesses record a daily or per-payout summary from the payment processor instead, either through an integration or a journal entry, and keep the detail in the processor's reports.
Do sales receipts include GST?
They should if the sale is taxable and you're registered. Apply the GST tax code on each line, just as you would on an invoice, so the 5% goes to GST/HST payable instead of income.
Want this off your plate?
Flat-fee bookkeeping for Edmonton small businesses. Month to month, no surprises.
Book a free 15-min callThis article is general information for Alberta businesses and isn't tax or legal advice. Rules and thresholds change, so confirm your situation with your accountant or CRA.