Their main purpose is to serve as legal proof of the sale. Bill vs Invoice: Main Differences Meaning & Purposeīoth bills and invoices are commercial documents issued by the seller, that detail the goods and services a customer purchases.īills, however, are used for one-time and up-front payments, typically for retail services. The purpose of a bill is to serve as legal evidence for both the buyer and the seller that a sales transaction took place.īilling is mostly common for retail businesses, such as grocery stores, merchandise stores, restaurants, and dining establishments, where the customer pays for the money upfront. It is printed or written as a statement for the charges owed. It is a document that outlines the amount that a consumer owes for goods and services received and rendered. What Is a Bill?Ī bill refers to the amount of money a customer owes a business. If you want to learn how to fill out an invoice from scratch, head over to our guide on how to make an invoice. And since an invoice serves as a demand for payment, it’s typically issued after the delivery of the purchased product or service.Īnother important distinctive feature of invoices is that they represent the presence of credit, as the seller is not receiving cash immediately, but at a future date. The purpose of an invoice is to request payment, at a specified payment term, such as net-30. It details the overall products provided and services rendered, the amount of money that is owed for the said work, and both the seller and buyer’s contact information. Automate Bills and Invoices with DeskeraĪn invoice, also known as a sales invoice, is a commercial document issued by a business to its clients.In this guide, we will be going over these key factors that distinguish bills and invoices from each other, along with their importance and uses in business. They are two separate documents, used for different purposes. With that being said, bills and invoices are not entirely identical. Want to learn how online invoicing can boost your business? Take a look at our guide on “ Why You Should Invoice Online.Many businesses and customers use the terms “ invoice” and “bill” interchangeably, as both documents contain details of the sale and are part of the purchase cycle. If you had dinner at a restaurant, you can expect to receive the bill immediately – instead of an invoice at a later date. However, bills are more likely to be paid upfront, and immediately. The customer pays after they’ve already received a product or service. When sending an invoice to a customer, it’s pretty likely that the business in question is extending credit. Recipients of those invoices generally refer to them as bills, and record them for payment as such.Īnd there’s another key difference between how people use the terms “invoice” and “bill”. Businesses send out invoices to customers, or invoice them for products and services. So why the difference in terms which are seemingly interchangeable?Īccording to accounting software platform Quickbooks, invoice is the term used by businesses seeking to collect customer payments. An invoice is also known as a bill or sales invoice.”īusiness Dictionary defines a bill as “Document evidencing one party’s indebtedness to another, such as an invoice.”Įach definition refers to the other term as an example. If goods or services were purchased on credit, the invoice usually specifies the terms of the deal, and provide information on the available methods of payment. Investopedia defines an invoice as “a commercial document that itemizes a transaction between a buyer and a seller. It’s just that the sender and receiver refer to them in different ways. Though they might have some assumed characteristics, invoices and bills are pretty much the same thing. But for some, there’s this idea that invoices and bills are two separate things. And for the most part, people assume they know the meaning of the term in use. In the world of transactions, the terms “invoice”, “bill”, “purchase order”, “statement”, and the like are thrown around with abandon. The short answer is this: it depends on who’s doing the talking.
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