Paid Invoice: Definition, Required Details, How to Create an Example [Excel Template Download]

A paid invoice is an updated invoice that confirms full payment for goods or services. It acts as formal proof of settlement, supporting accounting accuracy, audit compliance, dispute prevention, and legal or warranty verification.

Key Takeaways

• Paid invoices are essential for accounting records, cash-flow tracking, audit readiness, and dispute prevention.
• Businesses and individuals can create paid invoices in several ways, including invoicing software and standardized templates.
• Prevents discrepancies by matching orders, invoices, and payment references.
• Paid Invoices require mandatory details such as seller and buyer info, invoice number, itemized charges, totals, and validated paid notation.

What Is a Paid Invoice?

A paid invoice is an internal document issued by a business or an individual to confirm receipt of payment from a customer for goods or services delivered. It may be paper-based or electronic and is essential for commercial activity, invoicing workflows, and VAT documentation.

The invoice is clearly marked with wording such as “Paid,” “Paid in Full,” or “Settled.” This mark serves as recognized confirmation between both parties that payment has been completed.

In a typical business transaction:

1. The seller issues an invoice to the buyer.
2. Once the buyer pays, the seller updates or reissues the invoice as paid.

This paid invoice acts as a reliable record confirming that the supplier has received payment for the goods or services provided at a specific date.

For accounting and tax compliance, it is strongly recommended to retain copies of all paid invoices. Tax authorities may request them during audits.

Why Is a Paid Invoice Important?

Paid invoices are core accounting records. They confirm settlement, support compliance, and reduce operational risk.

Inventory Tracking

A paid invoice confirms a finalized sale, allowing inventory systems to update stock immediately. This improves:

• real-time stock accuracy
• demand forecasting
• replenishment planning
• avoidance of stockouts and excess inventory

Audit Trail and Financial Transparency

Paid invoices are primary evidence of revenue and cash receipt. They:

• validate sales in internal and external audits
• support VAT/GST and income tax reporting
• provide traceable links between orders, invoices, and payments
• deter revenue manipulation and internal fraud through documented settlement

Preventing Payment Discrepancies

They reconcile payments with accounting records by showing:

• amount received
• payment date
• payment method and reference
• This reduces posting errors and accelerates dispute resolution on pricing, quantities, or delivery issues.

Legal and Warranty Support

Paid invoices establish:

• transaction date
• buyer and seller identity
• goods/services delivered
• payment completion

Required Information on a Paid Invoice

Whether in paper or digital form, a paid invoice must contain specific details to ensure

Paid Invoice Example

France Paid Invoice Template (Excel Format Download)

Here is a ready-to-use France Paid Invoice template to help you issue clear, legally compliant, and professional paid invoices. It includes French-required fields, automatic totals, VAT formatting, and a built-in “Paid in Full” confirmation section. Fully editable for any business use.

Download France Paid Invoice Excel Template Here

How to Create a Paid Invoice?

A paid invoice is created by taking the original invoice and formally confirming that the full amount has been received. You can do this manually, in Excel, or through ERP/billing/accounting software depending on your transaction volume and how structured your finance process is.

Manual (Paper or Word/PDF)

Manual paid invoices work best for low-volume billing or simple one-off transactions where you want direct control over the document.

• Start with the original invoice as your base document , you can use the example above
• Add a clear paid status such as “Paid” or “Paid in Full”
• Record the payment date
• Specify the payment method (bank transfer, card, cash, cheque, digital wallet, etc.)
• If relevant, include the transaction or bank reference number
• Add an authorized signature and/or company stamp (recommended for strong evidence)
• Send the paid invoice to the customer and archive a copy for your accounting files

Using an Excel Template

Excel is ideal when you want a structured format, automatic totals, and easy recordkeeping without a full system.

• Open your paid invoice Excel template (or duplicate the original invoice file). Download Paid Invoice Excel Format Here
• Fill in seller and customer information exactly as on the base invoice
• Confirm invoice number and issue date
• Add or verify line items, quantities, unit prices, VAT rates, and totals
• Update the paid section with payment date, method, and reference
• Mark the status clearly as “Paid in Full”
• Save the file for internal records and export a PDF version to send to the customer
• Log the payment in your tracking sheet or cashbook

Using ERP, Billing, or Accounting Software

This is the most reliable method for recurring billing, approvals, audit readiness, and automated reconciliation.

• Open the invoice in your system and confirm customer and invoice details
• Register the incoming payment against the invoice
• Select the payment method and enter the payment reference if applicable
• The system automatically updates the invoice status to “Paid”
• Generate or download the paid invoice version (often stamped automatically)
• Send it to the customer directly from the system
• Ensure the payment and invoice are reconciled in your general ledger and accounts receivable module

Who Can Issue a Paid Invoice?

Paid invoices may be issued by different parties depending on the context.

Paid Invoices Issued by Suppliers

This is the standard case. The supplier marks the invoice as paid once funds are received. The paid version may be sent back to the customer for confirmation.

Paid Invoices Issued by Customers

In some cases, customers may mark the invoice as paid after confirming the debit from their account and send evidence of payment to the supplier.

Paid Invoices in Public Procurement

For contracts involving public institutions, a public accountant verifies supporting documentation and signs the invoice, noting the scheduled payment date.

Unpaid Invoice: Definition and Difference

An normal unpaid invoice is issued for goods delivered or services rendered that have not yet been settled. Once the seller issues the invoice, payment is expected before the due date. If the due date passes without payment, the invoice remains unpaid.

Conclusion

A paid invoice is an invoice updated after full settlement to confirm the customer has paid and the balance is closed. It provides solid proof of payment for audits, disputes, or warranty claims. To be valid, it must include all standard invoice details plus a clear “Paid” or “Paid in Full” status, payment date, payment method, and ideally a transaction reference. A stamp or signature can strengthen its evidentiary value.

You create it by marking the original invoice as paid manually, in Excel, or through accounting or ERP software once funds are received.