What is an Invoice? History, Types & Facts
Here you’ll find a short guide: what an invoice actually is, how it started, and what kinds of invoices people use today in different parts of the world.
What is an Invoice?
Put simply, an invoice is a piece of paper (or a digital file) that says: “I sold you this, you owe me this much.” The seller sends it to the buyer. On it you’ll usually see who sold what, how many, at what price, and the total. People use it to remember the deal, to do their books, and to ask for payment. In lots of places, the law says you have to give something like an invoice when you sell things that are taxed. So it’s both a reminder (“please pay”) and a record (“this deal happened”).
When Was the First Invoice? Where? Who “Invented” It?
Nobody woke up one day and “invented” the invoice. The habit of writing down “who owes what” is very old. Different civilisations did it in their own way.
Mesopotamia (roughly 3000 BC)
In the area we now call Iraq, traders in Mesopotamia were already keeping records of their deals. They wrote on clay tablets in a script called cuneiform: what was traded, how much, and with whom. Those tablets worked like both a contract and a receipt. So when people ask “where did the first invoice come from?”, one common answer is: Mesopotamia, something like 5,000 years ago. Not an invoice in the modern sense, but the same idea—written proof of what was agreed and what is owed.
Egypt (around 1200 BC)
In Egypt, scribes wrote on papyrus instead of clay. They noted trades and taxes. So again: written records of who gave what and who owed what. Same idea, different material.
Italy, 15th century: the system we still use
What we think of as “proper” bookkeeping and invoicing really took shape in Europe. An Italian monk and mathematician, Luca Pacioli, wrote a famous book in 1494 that explained double-entry bookkeeping. Merchants in Venice and elsewhere were already doing something similar; his book put it in one place and spread it. After that, handwritten invoices—with date, items, quantities, prices—became normal, and people kept them with their ledgers. So if you want one name for “who set the foundations for the invoice as we know it,” that name is often Luca Pacioli, in Italy (Venice).
From paper to digital
When the printing press appeared, people could print standard invoice forms. Later, in the 19th century, those forms often had the company name, address, and logo. Then came the typewriter and carbon paper—easier to copy. In the 20th and 21st centuries, invoicing moved to computers, email, and e-invoicing. Many countries now want or require digital invoices. The idea is still the same: “here’s what was sold, here’s what you owe.”
What Kinds of Invoices Exist?
Depending on where you are and what you’re doing, you’ll hear different names. Here are the main ones.
Commercial invoice (the “normal” one)
This is the usual invoice you send when a sale is done. It has you (seller), the buyer, the stuff you sold, the prices, and the total. It’s the one you keep for your accounts and the one the buyer often needs to reclaim tax. Rules can differ: in the EU, UK, or elsewhere, the exact fields may change, but the idea is the same—a proper record of the sale.
Proforma invoice (the “draft” one)
A proforma looks like an invoice but it’s not the final bill. People use it for quotes, for customs (to show the value of goods before they’re shipped), or to agree on a price in advance. When the sale is really done, you still need a real (commercial or tax) invoice. In most countries you can’t use a proforma to reclaim VAT—you need the final tax invoice.
VAT / tax invoice
Where there’s VAT (or GST, sales tax, etc.), the tax office often wants a special invoice that shows the tax. That’s the VAT invoice or tax invoice. It usually has to show the seller’s tax number, the rate, and the tax amount. The name of that number changes by country: in the UK it’s “VAT number,” in Belgium and the Netherlands “BTW-nummer,” in Poland “NIP,” in Romania “CUI” or “Nr. TVA,” and so on. The Invoice Types page has a table by country.
How it works in different places
- EU: For business-to-business sales, VAT invoices are required. Each country has its own format and field names (BTW, UID, NIP, CUI/TVA, etc.).
- UK: If you’re VAT-registered, you have to issue VAT invoices that follow HMRC rules.
- USA: There’s no nationwide VAT; states have their own sales tax rules. Commercial invoices are used for trade and bookkeeping.
- Elsewhere: Many countries have a “tax invoice” or “fiscal invoice” with a local tax ID (e.g. Turkey: Vergi Kimlik No; Serbia: PIB; Bulgaria: DDS).
In Short
An invoice is a document that says what was sold and what is owed. The idea goes back to Mesopotamia (clay tablets, around 3000 BC). The system we use today was spread by Luca Pacioli in 15th-century Italy. The main types are: the commercial invoice (the real bill), the proforma (a draft or quote), and the VAT/tax invoice (for tax reclaim). Names and rules depend on the country. You can use our free invoice generator to create a PDF invoice that fits your country.