Invoice
Learn what an invoice is, what to include on one, the main types, and how to send invoices in South Africa.
Published Wednesday 12 August 2026
Table of contents
Key takeaways
- An invoice is a document you send to a customer listing goods or services provided and requesting payment for them.
- In South Africa, VAT-registered businesses must include their VAT number and charge VAT at 15% where applicable.
- Clear payment terms help you get paid on time and protect your cash flow.
- Keeping accurate invoice records supports tax compliance and simplifies reporting to SARS.
What is an invoice?
An invoice is a document a seller issues to a buyer that lists goods or services provided and requests payment. It's also called a bill and serves as a formal record of the transaction between you and your customer.
Why invoices matter for your business
Invoices do more than ask for payment. They create a paper trail of your sales, help you track what customers owe, and support your VAT and income tax records when reporting to SARS, which is a core part of good small business accounting. Accurate invoicing also protects your cash flow by making it clear when payment is due and reducing disputes.
Handy resources
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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.
According to Business Partners Limited, citing National Treasury data, 95,399 invoices older than 30 days, worth a combined R12.4 billion, remained unpaid at the end of the second quarter of 2025.
What to include on an invoice
A complete invoice helps your customer understand what they're paying for and when payment is due. For a step-by-step walkthrough, read our guide on how to make an invoice. Include these details on every invoice:
- invoice number
- invoice date
- your business name, address and VAT number (if VAT registered)
- the customer's details
- a description, quantity and rate for each item
- the subtotal
- VAT at 15% where it applies
- the total amount due
- payment terms and accepted payment methods
Types of invoices
Different situations call for different types of invoices. Here are the most common ones you might use:
- Standard invoice: a straightforward request for payment after delivering goods or services
- Pro forma invoice: a preliminary invoice sent before work begins, often used for quotes or customs
- Recurring invoice: an invoice issued on a regular schedule for ongoing services
- Interim invoice: a partial invoice sent during a long project to bill for work completed so far
- Final invoice: the last invoice on a project, covering remaining amounts due
- Credit note: a document that reduces the amount owed, often issued for returns or corrections
- Overdue invoice: an invoice that has passed its payment due date without being paid
Invoice vs quote
A quote gives your customer an estimated cost before you start work, helping them decide whether to go ahead. An invoice shows the actual cost and requests payment after you've delivered the goods or services.
Invoice vs bill vs receipt
An invoice is a request for payment that you send to your customer. A bill is the same document from your customer's point of view, representing what they owe you. A receipt confirms that payment has been made and the transaction is complete.
Invoice payment terms
Payment terms tell your customer when you expect to be paid. Setting clear terms upfront helps you manage cash flow and avoid misunderstandings. Common payment terms in South Africa include:
- Due on receipt: payment is expected immediately when the invoice is received
- Net 7: payment is due within 7 days of the invoice date
- Net 14: payment is due within 14 days of the invoice date
- Net 30: payment is due within 30 days of the invoice date
- End of month: payment is due by the last day of the month
Clear terms help you get paid on time, reduce the need for follow-ups, and keep your cash flow healthy.
How to create and send an invoice
Creating an invoice is straightforward when you follow a consistent process. Here's how to do it:
- Add your business name, address and VAT number (if applicable), along with your customer's details.
- List each item or service with its description, quantity, rate and VAT at 15% where it applies.
- Set the invoice number, invoice date and payment terms.
- Check that the subtotal, VAT and total are correct.
- Send the invoice to your customer and keep a copy for your records.
You can send invoices online with Xero, which makes it easy to track what's been paid and follow up on overdue amounts.
Send professional invoices with Xero
Xero's online invoicing helps you create and send invoices in minutes. You can customise your invoice template, set up automatic payment reminders and offer your customers more ways to pay. With everything in one place, you'll spend less time on admin and more time running your business. Xero customers who use online invoice payments get paid up to twice as fast, so it's worth trying, and you can get one month free to see how it works for your business.
FAQs on invoices
Here are answers to common questions about invoices.
What is the purpose of an invoice?
An invoice formally requests payment for goods or services and provides a record of the sale for both you and your customer.
Does an invoice mean you have to pay?
An invoice is a formal request for payment. Once you've received the goods or services as agreed, you're expected to pay by the due date shown on the invoice.
When should you send an invoice?
Send an invoice as soon as you've delivered the goods or completed the service. Prompt invoicing helps you get paid sooner.
What is an e-invoice?
An e-invoice is an electronic invoice sent digitally rather than on paper. It speeds up delivery, reduces errors and is easier to store and retrieve.
What is the difference between an invoice and a receipt?
An invoice requests payment before the customer has paid. A receipt confirms that payment has been received.