Canadian invoicing combines everyday billing language with federal and provincial tax terminology. This glossary explains the terms freelancers, contractors, consultants, professionals, and small businesses commonly see when creating invoices, applying GST/HST, PST, RST, or QST, tracking expenses, and collecting payments.
These definitions are general educational information. Tax and legal rules depend on the transaction, province or territory, registration status, and business circumstances. Consult the CRA, Revenu Québec, the applicable provincial authority, or a qualified professional when needed.
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An account statement summarizes a customer's invoices, payments, credits, and outstanding balance over a period. It does not normally replace the individual invoices.
Accounts payable is the money a business owes suppliers, contractors, and other vendors for goods or services received but not yet paid for.
Accounts receivable is the money customers owe a business for invoices that have been issued but not yet paid.
An accounts-receivable aging report groups unpaid invoices by how long they have been outstanding, helping a business prioritize reminders and collection work.
Accrual accounting records income when it is earned and expenses when they are incurred, regardless of when payment is received or made.
The amount due is the amount the customer is currently expected to pay after accounting for deposits, discounts, credits, and partial payments.
The balance due is the unpaid portion of an invoice after payments, credits, refunds, and adjustments.
Bank reconciliation compares the transactions recorded in the books with those on the bank statement to identify discrepancies, duplicates, or missing transactions.
A bill is a payment request viewed from the buyer’s perspective. The seller issues an invoice, while the recipient may describe it as a bill.
A billing address is the customer address associated with an invoice or payment account. It may differ from the service or delivery address.
Bookkeeping is the process of recording and organizing invoices, payments, expenses, receipts, bank activity, and other financial transactions.
A Business Number is a nine-digit federal identifier used by the CRA for a business or legal entity. Program accounts, such as a GST/HST account, are connected to the BN using additional letters and numbers.
The Canada Revenue Agency administers federal tax programs, including GST/HST registration, returns, and guidance. In Québec, Revenu Québec generally administers GST and QST for businesses operating in the province.
Cash accounting records income when money is received and expenses when they are paid.
A client is a person or organization purchasing professional services. In invoicing software, “client” and “customer” are often interchangeable.
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A commercial invoice is a customs document used for goods shipped internationally. It describes the goods, their value, origin, buyer, and seller, among other details customs authorities may use to assess duties and taxes.
A compliant invoice contains the information needed for the transaction and, where applicable, the details required to support the tax charged and any input tax credit or input tax refund claim. Requirements can vary by amount and context.
A compound tax is calculated on an amount that already includes another tax. This can appear in certain jurisdictions or custom formulas; the everyday GST and QST combination in Québec is calculated separately on the pre-tax price rather than compounded.
A contractor is a self-employed person or business engaged to perform work under an agreement rather than as an employee. Classification depends on the actual working relationship and applicable law.
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A credit note, sometimes called a credit memo, reduces an amount previously invoiced. It can correct an overcharge, recognize returned goods, apply a later discount, or reverse part of a transaction.
A CSV export is a plain-text file organized into rows and columns. It can be opened in spreadsheet software or imported into bookkeeping, tax, and reporting systems.
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Currency identifies the monetary unit used on an invoice, such as CAD or USD. It should be stated clearly for cross-border work.
A custom tax formula is a user-defined combination of rates or rules used when a standard provincial, territorial, or state formula does not match the transaction.
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A customer is the person or organization buying goods or services. Professional-service businesses often use the word client.
A data export creates a downloadable copy of selected business records, such as invoices, clients, expenses, or tax details, for analysis, portability, backup, or use in another system.
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An invoice delivery status shows what happened after an invoice email was sent, such as queued, sent, delivered, opened, bounced, or failed. An open event does not necessarily prove that every invoice detail was read.
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A deposit is money collected before all goods or services are delivered. It may reserve time, cover initial costs, or reduce the amount due later.
A discount reduces the price of a product, service, or invoice. It may be a percentage, fixed amount, early-payment discount, or negotiated adjustment.
A draft invoice is saved but not finalized or delivered. It can normally be edited before it is formally issued.
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The due date is the date by which the customer is expected to pay the invoice.
An early-payment discount is a reduction offered to a customer who pays before a specified date.
The effective year identifies the year or period for which a tax formula is intended. Year-labelled formulas help businesses avoid accidentally selecting an outdated rate.
An estimate is an approximate projection of the cost or effort required for proposed work. The final amount can change as the scope, quantities, time, or costs become known.
An exempt supply is not subject to GST/HST. A registrant does not charge GST/HST and generally cannot claim input tax credits for purchases used to make exempt supplies.
An expense is a business cost such as software, supplies, rent, travel, professional services, or payment-processing fees.
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An expense category groups similar business costs for tracking and reporting.
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Fixed-fee billing charges an agreed amount for a defined service or deliverable rather than billing solely by time or units.
The gross amount is the total before specified deductions or reductions. Its precise meaning depends on whether the context is revenue, payroll, tax, or an invoice.
The Goods and Services Tax (GST) is a federal value-added tax that applies to most taxable supplies made in Canada outside HST treatment.
Current rate: 5% Calculate this tax →
A GST/HST account number identifies a registrant's GST/HST program account. It is based on the federal Business Number and includes a program identifier and reference number.
A GST/HST registrant is a person or organization registered for GST/HST and subject to the applicable obligations for charging, collecting, reporting, and remitting the tax.
A GST/QST return reports the tax collected, input tax credits, input tax refunds, and the net amount owing or refundable for a reporting period.
The Harmonized Sales Tax combines the federal GST with a provincial component in participating provinces. The rate depends on the place-of-supply rules and applicable province.
Current rates: NB 15%, NL 15%, NS 14%, ON 13%, PE 15% Calculate this tax →
An hourly rate is the price charged for one hour of work. An hourly invoice generally multiplies the rate by approved or recorded hours.
An input tax credit generally allows a GST/HST registrant to recover GST/HST paid or payable on eligible purchases and expenses used in commercial activities.
An input tax refund is the Québec term for recovering eligible QST paid or payable on purchases and expenses used in commercial activities.
An installment payment splits a total into several payments due on set dates or at defined milestones.
An Interac e-Transfer is an electronic funds transfer between Canadian bank accounts. It is commonly used by self-employed workers and small businesses to receive payment on an invoice.
An invoice is a formal payment request that itemizes goods or services, identifies the seller and customer, states the amount owed, and explains the payment terms.
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The invoice date, also called the issue date, is the date the invoice is created or formally issued.
An invoice number is a unique identifier assigned to an invoice. A consistent sequence makes records easier to search, reconcile, and discuss with customers.
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An invoice status describes where the document is in its lifecycle, such as draft, sent, delivered, viewed, overdue, partially paid, paid, void, or written off.
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An invoice tax breakdown shows each applicable tax separately, such as GST and QST or GST and PST, rather than displaying only one combined tax amount.
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An invoice template controls the reusable layout of an invoice, including the logo, colours, typography, headings, columns, notes, and payment details.
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An itemized invoice lists products, services, hours, quantities, prices, discounts, taxes, and other charges as separate line items.
A late fee is an additional amount that may apply when an invoice is not paid by the agreed deadline. It should be disclosed clearly and comply with applicable agreements and law.
A line item is one separately described product, service, time entry, expense, discount, or charge on an invoice.
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Markup is the percentage or amount added to a cost to arrive at a selling price.
Net 15, Net 30, and Net 60 mean the invoice balance is due within 15, 30, or 60 calendar days of the agreed starting date, usually the invoice date unless the contract says otherwise.
Net tax is generally the GST/HST or QST collected or collectible, adjusted by eligible input tax credits, input tax refunds, rebates, and other required adjustments for the reporting period.
Invoice notes provide extra instructions or context, such as payment details, service information, project references, tax explanations, or a thank-you message.
An online payment is made electronically through a card processor, bank-transfer service, digital wallet, or another online system.
An overdue invoice is an unpaid invoice whose due date has passed.
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A paid invoice is an invoice whose balance has been paid in full.
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A partial payment pays only part of the invoice balance. The remaining amount stays outstanding until it is paid or otherwise adjusted.
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A payment link is a web address leading to a hosted page where a customer can view an invoice or pay an amount electronically.
A payment method is the way a customer pays, such as Interac e-Transfer, card, cheque, cash, bank transfer, or wire transfer.
A payment processing fee is the amount a payment provider or financial institution charges to process a transaction.
A payment reminder is a message sent before or after the due date to remind the customer about an upcoming or overdue payment.
Payment terms explain when and how the invoice must be paid. They may cover the due date, currency, accepted methods, deposits, installments, early-payment discounts, and late fees.
A PDF invoice preserves the document's layout so it can be downloaded, printed, attached to an email, and archived.
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The place-of-supply rules help determine which GST/HST rate applies to a transaction. The result can depend on the type of supply, customer location, delivery, performance, and other facts.
The pre-tax amount is the taxable base for a transaction — the value of the goods and services before GST, QST, or other taxes are added.
A pro forma invoice is a preliminary document showing expected prices and terms before the final transaction. It should be clearly labelled so it is not mistaken for a final payment request.
Profit margin expresses profit as a percentage of the selling price. It differs from markup, which is calculated against cost.
A progress invoice bills for a completed phase, milestone, percentage, or approved portion of a longer project.
Provincial Sales Tax is a separate provincial retail sales tax used in certain provinces. Registration, taxability, rates, exemptions, and invoicing requirements vary by province.
Current rates: BC 7%, SK 6% Calculate this tax →
A purchase order is a buyer-issued authorization for specified goods or services. The PO number is often added to the related invoice for approval and matching.
A QST registration number identifies a registrant on file for Québec Sales Tax. It is distinct from the NEQ and from a GST registration number.
Quantity is the number of units, hours, sessions, days, or items being billed.
The Québec Business Number (NEQ) is an identifier assigned to businesses registered with the Québec enterprise register. It does not replace a GST or QST registration number.
The Québec Sales Tax (QST) is Québec's provincial value-added tax, generally calculated on the selling price before GST.
Current rate: 9.975% Calculate this tax →
The Quick Method is a simplified calculation some registrants can elect for figuring out the GST and QST they owe. It is not the same as simply adding up the rates shown on invoices.
A quote is an offer to perform specified work or provide specified items at stated prices and terms. It is usually more definite than an estimate and may expire after a stated period.
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Quote-to-invoice conversion creates an invoice from an accepted quote while reusing the customer, line items, prices, taxes, and notes. The invoice normally receives a separate invoice number and due date.
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A receipt confirms that payment has been made. An invoice requests payment; a receipt documents payment.
A recurring invoice is created or sent on a repeating schedule for ongoing services, memberships, rentals, or subscriptions.
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A refund returns money already paid by a customer because of a cancellation, overpayment, duplicate payment, return, or correction.
A tax remittance is the payment of net GST/HST, QST, PST, or RST owing to the relevant tax authority for a reporting period.
A reporting period is the time covered by a sales-tax return, such as monthly, quarterly, or annually.
Retail Sales Tax is the name used for a separate provincial retail sales tax in Manitoba. Rules differ from GST/HST and from the sales taxes of other provinces.
Current rate: 7% Calculate this tax →
Revenu Québec administers Québec tax programs and generally administers GST and QST registration, returns, and remittances for businesses in Québec.
Revenue is the amount earned from selling goods or services before subtracting business expenses.
A sales invoice is an invoice issued by the seller to a customer. The same document may be treated by the customer as a purchase bill.
In Canada, sales tax is a broad term that can refer to GST, HST, PST, RST, or QST depending on the province, territory, and transaction.
The service date identifies when work was performed or the beginning and end of a billing period.
A small supplier is generally a person whose worldwide taxable supplies, including zero-rated supplies, do not exceed $30,000 in a single calendar quarter or over the previous four consecutive calendar quarters. Exceptions and special rules apply.
A subcontractor is a person or business engaged to perform part of the work covered by another party's main contract.
The subtotal is the sum of invoice line items before applicable taxes and specified adjustments.
A supplier is a person or organization that sells goods or provides services to a business.
In tax vocabulary, a supply generally means the sale, lease, or provision of a good or service.
A supporting document backs up a financial transaction — for example an invoice, receipt, contract, statement, or proof of payment.
A tax formula is the rate or combination of rates used to calculate tax on an invoice for a province, territory, state, or custom situation.
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A tax registration number identifies a business registered to collect a particular tax, such as GST/HST, QST, PST, or RST.
A tax-exclusive price does not include the applicable tax. GST/HST, QST, PST, or RST is added to the stated price.
A tax-inclusive price already contains the applicable tax. The invoice may still need to disclose the tax or indicate that it is included.
A taxable supply is a supply made in the course of a commercial activity that is subject to GST/HST, including zero-rated supplies.
A timesheet records hours, dates, tasks, projects, and sometimes approval status. Approved entries can support an hourly invoice.
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The unit price is the amount charged for one unit, hour, item, session, day, or other billing measure.
A void invoice is retained in the records but marked as invalid or cancelled so it is no longer collectible. Keeping the record preserves invoice numbering and audit history.
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A wire transfer is a bank-to-bank payment sent through a wire network, often used for large or international payments.
A Word invoice export is an invoice downloaded as an editable .docx document. It is useful when wording needs to be adjusted or the file must be stored in a familiar office format.
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A write-off removes or reduces an amount that a business no longer expects to collect. The accounting and tax treatment depends on the circumstances and accounting method.
A zero-rated supply is taxable at 0% GST/HST. No tax is collected, but a registrant may generally claim input tax credits on eligible purchases used to make the supply.
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