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The major difference between incoming document and attachment is that incoming document have a whole process connected to it. Where you can run approval of a incoming document before it is posted. And the incoming document can be foundation for different kinds of transactions. Often incoming document is also connected to a process where you receive electronic documents either from files or scanned PDF files that are being read by a PDF interpreter.
Attachment are more loosely connected to the record there are very little underlying data behind an attachment and you can not send them on approval like you can with an incoming document.
So if you do not have any use for the processes around incoming document and maybe you have an external procurement system i would recommend you use attachments.
I hope that gave you a little better understanding. You can read more about attachments here.
docs.microsoft.com/.../ui-how-add-link-to-record