Sales Invoice vs Official Receipt: BIR Regulations Explained

Invoices and receipts might sound similar, but they're actually quite different—and the Bureau of Internal Revenue (BIR) has strict rules about when to use each one.

This guide will help you understand the differences between invoices vs receipts, and how to follow the new rules from BIR. We'll walk you through everything you need to know to stay compliant with the current Ease of Paying Taxes (EoPT) Act so you can avoid costly penalties.

In this article, we will cover:

• What is a sales invoice?
• What is an official receipt?
• What is a collection receipt?
• Sales invoice vs official receipt vs collection receipt: what’s the difference?
• Sales receipt vs invoice examples
• New BIR directives: how to stay compliant
• Penalties for non-compliance
• Tools to organize your invoices and receipts
• Frequently asked questions

What is a sales invoice?

According to BIR regulations, a sales invoice is written proof that shows the sale of goods and/or services. It’s issued to customers or buyers whenever a transaction takes place. It's like a bill that shows what you sold and how much the customer owes.

When do you need to issue a sales invoice?

• For any sale worth ₱500 or more
• Before you deliver goods or at the same time you deliver them
• For all business transactions

What must be included in your sales invoice?

• Your business name and TIN number
• Customer's name (and TIN if they have one)
• List of what you sold (be specific)
• Price of each item
• Total amount
• Taxes (like VAT if applicable)
• Date of sale
• Invoice number

What is an official receipt?

An official receipt is proof that someone paid you. However, BIR has recently changed the rules—you can't use official receipts for most sales after June 30, 2024. Sales Invoices now serve as the primary document for sales of goods and services.

What this means:

• Official receipts are mostly being phased out
• If you still use official receipts as primary evidence of your sales, BIR considers this a violation
• You can still use them as back-up documents
• You can use them in special cases approved by BIR

The key point: Don't use official receipts for regular sales anymore. Use sales invoices instead.

Here are two examples that show how official receipts can still be used:

• Example 1: A business provides an official receipt to clients as a courtesy document for internal tracking or customer reassurance. However, only the invoice can be used to claim input tax credits or support deductions with BIR.
• Example 2: A consultant issues both a sales invoice and an official receipt while shifting to an EoPT-compliant system. Clients may still see the receipt, but for tax compliance and reporting, the invoice is what matters to BIR.

What is a collection receipt?

A collection receipt is an official document that says “I received your payment.” It’s an official acknowledgment that money has been received, usually for payments not directly tied to the sale of goods.

When it comes to invoices vs receipts, it’s important to understand that a collection receipt isn’t proof that you made a sale—it only confirms that you received funds.

When do you use collection receipts?

• When someone pays you for professional services (e.g. a consultation)
• For installment payments
• When someone gives you a deposit
• When collecting payment for an invoice you already issued

Collection receipts are still allowed by BIR, but they serve a different purpose than sales invoices.

BIR sales invoice vs official receipt vs collection receipt: What is the difference?

While invoices and receipts share some similarities, they are used at different stages of the sales process and document different information. In the Philippines, the main difference is that sales invoices are issued before payment is received, while official receipts and collection receipts can be issued after payment is collected.

Sales invoice

A sales invoice is what you give your customer once you’ve delivered goods or services and need to request payment. Here are a few key things to keep in mind about BIR-compliant sales invoices:

• They’re the primary document recognized by BIR for recording sales
• You must list goods/services, amount due, taxes and payment terms
• Send sales invoices to your customers as soon as you deliver goods or services so they know exactly what they owe.

Official receipt

Official receipts are issued as proof of payment—but under new BIR regulations, they are no longer accepted as the primary record of a sale. Remember:

• Official receipts confirm that you’ve received payments for goods or services
• They can only be used as a secondary document under BIR RR 7‑2024 (not the primary sales record)
• They’re useful for buyer records or returns

Collection receipt

A collection receipt is similar to an official receipt but typically used for:

• Partial payments or deposits
• Internal tracking of payments received
• Transitional or legacy documentation in some businesses while they switch to EoPT-compliant sales invoice system

Here's a simple breakdown of the differences between sales invoices vs official receipts vs collection receipts:

The simple rule: Use Sales Invoices when you sell something. Use Collection Receipts when you receive payment for services.

Invoice vs receipt examples

To see the difference between these documents in practice, let’s look at examples of how a Sales Invoice and a Collection Receipt would be used in real transactions.

Sales invoice example

Collection receipt examples

New BIR directives: How to stay compliant

BIR has new rules that all businesses must follow. Here's what you need to do:

1. Switch from official receipts to sales invoices

• Stop using official receipts for sales
• Start using sales invoices

2. Update your systems

• Change your accounting software to create proper invoices
• Train your employees on the new rules
• Make sure all your invoice templates follow BIR requirements

3. Submit your old official receipts to BIR

• Tell BIR about any unused official receipts you have
• Convert them to invoices if possible
• Follow BIR instructions for disposal

4. Train your team

• Teach employees the difference between invoices vs receipts
• Make sure everyone knows when to use each document
• Create a checklist for proper documentation

5. Prepare for electronic invoicing

• BIR plans to require electronic invoices in the future
• Start preparing your technology systems now
• Stay updated on BIR announcements

6. Handle VAT correctly

• Add VAT to digital services
• Calculate VAT properly on all invoices
• Keep detailed VAT records

Penalties for non-compliance

BIR takes these rules seriously. Here are the penalties for not following them:

• Not issuing proper invoices: ₱1,000 to ₱50,000 per violation
• Using wrong invoice format: ₱1,000 to ₱10,000 per violation
• Still using Official Receipts for sales: Same as not issuing an invoice
• Not submitting your receipt inventory: ₱1,000 to ₱5,000

Other consequences:

• Loss of BIR benefits
• Business permit problems
• Criminal charges for serious violations
• More BIR audits and inspections

The bottom line: It's much cheaper to follow the rules than to pay these fines.

Sources: Bureau of Internal Revenue (BIR) Schedule of Compromise Penalties for Registration, Invoicing, Bookkeeping, and Compliance Requirements and Revenue Regulations No. 7-2024 

Tools to organize your invoices and receipts

Keeping track of invoices manually is hard and risky. Using accounting software makes it much easier to follow the rules of the Ease of Paying Taxes (EoPT) Act.

How QuickBooks helps you stay compliant:

• Creates BIR-approved Sales Invoices automatically
• Calculates VAT correctly
• Keeps proper numbering sequence
• Stores all records digitally (great for BIR audits)
• Updates with Philippine tax changes
• Helps you transition from Official Receipts to Sales Invoices
• Prepares you for future electronic invoicing

Using software like QuickBooks reduces mistakes, saves time and helps you avoid penalties. It's an investment that pays for itself by keeping you compliant with BIR rules.