Do you know the differences between budget, delivery note and invoice?

The business activity of any business is documented in documents such as budgets, invoices, and delivery notes. These are essential for proper accounting in companies and to make future forecasts to continue growing.

But what is the difference between a proforma invoice and a budget? Or what is the difference between a budget and a delivery note? These are some of the most common doubts that some entrepreneurs have when starting a business project.

In this article, we explain what a proforma invoice, a budget, and a delivery note are, and what the difference is between these documents. Also, we present software for invoices and budgets, where you can find templates to invoice easily and quickly.

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What is an invoice?

The invoice is the only document required to be issued by a company. Among other accounting processes, they are used to deduct the VAT on goods and services purchased by the company to carry out its business activity.

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The basic data that any invoice must contain are:

• Name and surname, address, and tax identification number (NIF) of the issuer and the recipient
• Description of the invoice, where you must add the basic information of the commercial transaction
• Amount (excluding taxes) and breakdown of each value
• Tax rate applied and tax amount
• Invoice number, place, and date
• Date of issue and payment method (date on which the operations are carried out if different from the issue date)

These fields may vary depending on the type of invoice you issue, which will depend on the particular case of the company, although those that may raise more doubts are those that most resemble budgets and delivery notes: proforma invoices.

Click here to learn what types of invoices exist and in which cases to use them.

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Proforma invoices

Proforma invoices are an estimate of what the final invoice will be, their purpose is purely informational. Generally, they indicate prices, the taxable base, and sales conditions. So what is the difference between a proforma invoice and a budget? The difference is that, in the event of a disagreement between the company and the client, the proforma invoice has legal validity (although it does not have accounting validity).

‍Find out more about proforma invoices.

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What is a budget?

A budget informs the client how much they will have to pay for the purchase of the good or service. It is a document that is valid once the client accepts it, not before, and it is mandatory for the client to sign it to accept it.

When the client has accepted the budget, as a company, you have the obligation to comply with that budget, so prices cannot increase. However, in case of unforeseen events, the budget can be modified, in which case it must be signed again.

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What is a delivery note?

The delivery note is the document that indicates that the good or service have been delivered or provided to the customer, and then the invoice is issued. The delivery note is issued for two purposes: it allows the company to securely verify that the good has been received or the service has been provided, and, on the other hand, for the customer, it allows rejecting the delivery note if what was received or provided does not comply with what was stipulated.

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Differences between budget, delivery note and invoice

Budgets, delivery notes, and invoices are documents that generate many doubts among entrepreneurs. Generally, proforma invoices and budgets are confused, budgets and delivery notes, or delivery notes and invoices.

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Difference between pro forma invoice and budget

The main difference between the proforma invoice and the budget is that the proforma invoice, although it does not have accounting value, does have legal value, so in case of disagreement, the company or the client can present it.

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Difference between budget and delivery note

The delivery note, although it has similar data to the budget, is not the same because its objective is totally different. The delivery note serves to prove the reception of a good or the provision of a service. In contrast, the budget indicates the value of the good or service and the obligation to comply with it, both on the part of the company and the customer.

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Difference between delivery note and invoice

The delivery note differs from the invoice because it does not prove that the customer has paid for the good or service, but indicates that they have received it or benefited from it. In addition, the delivery note is optional, but the invoice is a mandatory document when a sale of a good or service is made.

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Difference between budget and pro forma invoice

The budget and the proforma invoice include, more or less, the same information about the activity, although more information can be added to the budget. The difference lies in when they are delivered. The budget is the first document to be delivered, while the proforma invoice is delivered in a phase closer to the end of the service.

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How management software can help you

With invoice and budget software you can automate this accounting process. For many entrepreneurs it is difficult to remember every time they are going to create each type of document what data should be added, which is very important, as these are documents that determine the activity and, in the case of invoices, are mandatory.

But not only that, eliminating spreadsheets and paperwork that allows your company to save time to invest in other activities or create accounting documents from your mobile phone anywhere is possible thanks to invoice and budget software.

With taclia you can create invoices and quotes, with the help of templates, calculate your invoices and quotes automatically and send them to your customers by email from the same application. In addition, all invoices and quotations will be registered and linked to each customer, making it quick and easy to look up past information or review some data.

Plus, we know that your time is precious, so with taclia you don't waste time calculating taxes. All without the need for previous experience.

Find out more about taclia's task management software.