Invoice
Learn what an invoice is, what it must include, and how e-invoices, VAT invoices and pro forma invoices differ.
Published Friday 2 October 2026
Table of contents
Key takeaways
- An invoice is a document a seller issues to request payment for goods or services supplied, showing what was provided, the amount owed, and when and how to pay
- A VAT invoice is a specific document VAT-registered traders in Ireland must issue to certain customers, with prescribed details and a 15-day issue deadline
- A true e-invoice is a structured electronic file exchanged between systems, so a PDF or scanned copy sent by email doesn’t count
- A quote estimates a cost before work, a receipt proves payment afterwards, and a pro forma invoice is a preliminary estimate that carries no tax point
What is an invoice?
An invoice is a document a seller issues to request payment for goods or services supplied. It shows what was provided, the amount owed, and when and how to pay.
A clear invoice usually includes:
- the quantity of goods or services supplied
- the rate or unit price
- the total cost due
- a description of what was provided
- when and how to pay
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Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.
Once it’s ready, you can hand it over by post or email, and Xero’s guide to sending invoices to customers walks through the practical steps.
What invoice payment terms mean
Payment terms tell your customer how long they have to pay and set expectations on both sides. Getting them right keeps money moving into the business on a schedule you can plan around.
‘Net 14 days’, for example, means the full amount is due within 14 days of the invoice date. Clear terms help you forecast cash flow and stay on top of the money your customers owe you.
Invoice vs quote
It’s easy to mix up a quote and an invoice, so it helps to see where each one sits in a sale.
A quote is an estimate of what a job will cost, sent before any work is agreed. An invoice is the actual charge for goods or services already supplied. When you receive an invoice from a supplier, it’s a purchase invoice; when you issue one to a customer, it’s a sales invoice.
E-invoices and VAT invoices
As invoicing goes digital, two invoice types matter for Irish businesses: the e-invoice and the VAT invoice. You can already create and send documents online with Xero’s online invoicing, so it helps to know how each type works.
A true e-invoice is a structured electronic file that complies with the EU standard EN 16931, usually exchanged over a network such as PEPPOL between accounting systems so it can be processed automatically. Emailing a PDF or a scanned paper invoice isn’t a structured e-invoice, even though it travels electronically.
The EU VAT in the Digital Age (ViDA) package, adopted in March 2025, makes structured e-invoicing mandatory for intra-EU business-to-business transactions from 1 July 2030. Ireland has set out a phased domestic rollout starting with large corporates in November 2028, though these remain announced plans rather than enacted law.
A VAT invoice is the document a VAT-registered (accountable) trader issues to record a taxable supply, as required by Irish VAT law. It sets the supplier’s VAT liability and lets a VAT-registered customer reclaim the VAT charged.
It must show prescribed details, such as the date, a unique sequential number, the supplier’s name, address and VAT number, the customer’s details, a description and quantity, the VAT-exclusive amount, and the VAT rate and amount. A VAT invoice must also issue within 15 days of the end of the month in which the supply is made. This obligation covers supplies to other VAT-registered businesses and the other recipients Revenue specifies, rather than every customer.
Pro forma invoice
Some sales call for a preliminary document before anything is finalised, and that’s where a pro forma invoice comes in.
A pro forma invoice is a preliminary estimate a seller sends before a sale is finalised, so a buyer can review costs, arrange finance, or clear customs. It isn’t a demand for payment or a valid VAT invoice, and it doesn’t create a tax point. To see how it fits alongside other invoice types, read Xero’s overview of what an invoice is.
Invoice vs receipt
Buyers and sellers exchange more than one document around a single payment, so it’s worth separating the two you’ll use most.
An invoice is a request for payment, issued before the customer pays. A receipt is proof that payment has been received, issued after the money changes hands. Keep both for your records, and you can start with Xero’s free receipt template.
Simplify invoicing with Xero
Chasing payments and formatting documents by hand eats into time you’d rather spend on the business. With Xero you can create, send and track invoices online, set up automatic reminders, and see what you’re owed at a glance. Start today and get one month free to try it on your own invoices.
FAQs on invoicing
Still have questions about invoices? These quick answers cover the details Irish small business owners ask about most.
Is an invoice a legal document?
An invoice records what a customer owes for goods or services you’ve supplied, and you should keep copies for your records. A VAT invoice additionally carries specific requirements under Irish VAT law.
What’s the difference between an invoice and a bill?
They’re the same document seen from opposite sides: you issue an invoice to a customer, and that customer records it as a bill to pay. The wording usually depends on who’s holding it.
Do I have to issue a VAT invoice?
Only if you’re VAT-registered and supplying other VAT-registered businesses or the other recipients Revenue lists. Sales to private consumers don’t usually need a full VAT invoice.
Can I send an invoice as a PDF?
Yes, you can email a PDF for a customer to read and pay. A structured e-invoice is a separate, machine-readable file exchanged between systems, so a standalone PDF doesn’t meet that definition.