Quotation, proforma, PO, receipt, invoice: what each is

Small businesses often mix these documents up. Each has a different job, and some carry legal weight for tax. Here is what each is for, in the order they usually appear.

1. Quotation

An offer. It states what you will supply, at what price and on what terms, and for how long the offer is valid. It is not a demand for payment and not a tax document.

2. Purchase order (PO)

Issued by the buyer to confirm an order. It lists what they want, the quantity, the agreed price and the delivery terms. The usual order is: you send a quotation, the buyer sends a PO, you deliver and invoice. When you buy from a supplier, you issue the PO.

3. Proforma invoice

A preliminary bill sent before the supply, often to request an advance. It is not a tax invoice and cannot be used to claim input tax credit. Mark it clearly as a proforma invoice.

4. Payment receipt

Confirms that you received a payment: the amount, the date, the mode and what it was for. If you are registered for GST and receive an advance for a supply, a receipt voucher is generally required. Ask your chartered accountant how it applies to you.

5. Tax invoice, or final bill

For a GST-registered business, the tax invoice is issued for the supply. For services it generally includes:

• Your name, address and GSTIN
• A unique, consecutive invoice number of up to 16 characters, in a series for each financial year
• The date of issue
• The customer's name, address and GSTIN, if they are registered
• Place of supply and a description of the service with its SAC code
• Taxable value, the tax rate and the tax amount (CGST and SGST, or IGST)
• A signature

If you are not registered for GST, you cannot charge GST. You can issue a simple bill, and the document should not look like a tax invoice. Businesses above the turnover threshold also have to follow e-invoicing rules. At the time of writing that threshold is aggregate annual turnover above ₹5 crore, in force from 1 April 2026.

Check the current rules

Tax rules change and depend on your registration and your turnover. Confirm the details with your chartered accountant before you rely on any template, including ours.

BillTrail creates all five documents in the browser, with GST calculation and numbering, and you can save each as a PDF.

This guide is general information, not tax, legal or financial advice. Fees, rules and rates change, so confirm current details with the official source or a qualified professional.