Well, in the world of business transactions, ‘invoice’ and ‘bill’ are customary financial terms. The difference between the terms is decided on the basis of its origin. The sender and the receiver refer to it in two different ways, but it’s pretty much the same thing. Both the documents hold the same information and are seemingly interchangeable, but still, there is a fine line of difference. So, let’s talk about the difference between invoice and bill in detail in this blog!
But before we move on to discuss the difference between an invoice vs bill, we must understand what an invoice and a bill are.
What is an Invoice?
The French word ‘envoyer’ was morphed into the English word invoice which means to send. An invoice is a financial document that is sent by the vendor to the client requesting them to pay the amount they owe you. It outlines the list of services or products delivered to the client along with the cost of each. Moreover, it also covers vital information like
- An invoice consists of business records of goods or services provided to the client.
- It also states the payment details mentioning the amount of the goods or services provided.
- Besides, it also specifies the payment deadline with payment mode.
- It is generally used by companies or business owners to track their business expenses and revenue for taxation. It is a legally binding document and hence, there are certain protocols to maintain, like for example:
- Must not delete and edit an invoice once it is already sent to the client.
- Secondly, it must be numbered in sequential order and must not have any repetition in the invoice numbers.
What is a Bill?
It’s pretty the same, because once an invoice is sent then it is received by the client as a ‘bill’. Just like an invoice, it outlines the amount a client owes to his/her vendor. The other functions and features of a bill are:
- A bill is a vital record for the customer about a business transaction after its completion.
- A bill is issued before the payment process is initiated.
- Moreover, a bill is that record that was issued as an invoice from the supplier that is recorded as a “bill” at the customer’s end.
But in some cases, the bill stands out as a separate financial entity used in a grocery store, restaurant, or store, which outlines just the total amount and tax.
So, you might think that an invoice can be a bill? Ok, let’s find out!
Is an invoice a bill?
“One man’s ceiling is another man’s floor”- same way, an invoice sent by the seller is recorded as a bill at the customer’s end. Therefore, they are often used interchangeably. Moreover, both these words avoid confusion and ease the way of communication. Generally in our day-to-day use, we often prefer using the word ‘bill’ rather than ‘invoice’.
But does that mean there is no difference at all? Well, not exactly! There are certain differences between invoices and bills. Let’s discuss!
Difference between an invoice and a bill
Besides the origin of the invoice and the bill, there are quite a few differences that distinguish one from the other. The below chart will give a detailed description of invoice vs bill.
|Used to request payment from the client.||Used for upfront payments to complete the transaction in one go.|
|The services or the goods are provided to the client on a specific pre-approved date.||In this case, goods are provided instantly.|
|The same invoice may be referred to multiple times during the transaction.||Bill is for one-time use only.|
|Paid by the client within a certain timeframe.||Paid by the customer instantly.|
|Detailed information that includes services provided, the quantity of the item, business name and contact details, payment due date, taxes, total amount, etc.||Provides limited information that includes the price and the taxes.|
|Invoice is more than just proof. It records business finances, taxation, etc.||Bill serves as proof of the transaction for both buyer and seller.|
|Invoices are commonly used for:|
1. Tracking inventory
2. Keeping a check on the company sales.
3. Requests timely payment
4. Keeps a record of business revenue for taxation.
|Bills are used in retail business-like,|
2. Grocery stores
3. Shopping complexes
Departmental stores, etc.
Now as you know the difference between invoice and bill, let’s figure out how to create invoices with Billbooks!
How to create an invoice using Billbooks
Finding it difficult to create invoices? Billbook has got you covered with its super easy invoice templates. Creating invoices with Billbooks is not just simple, it is great! Let’s tell you how!
- Go to the ‘Invoices’ option on the left-hand side.
- As the page opens, check at the right-hand corner. Click on ‘New Invoice’ to create a new invoice.
- The page opens with pre-set data fields, where you just need to put the required information to get your invoice ready in a minute.
- Start with ‘Client Name’, then add a suitable title to your invoice in the ‘Title’ field.
- Next, fill in the ‘Project Name’. Put the project name for which you are creating your invoice.
- On the right-hand side corner, you get the ‘Invoice#’, which is a pre-set field that comes automatically with a number.
- Add the PO number if the client has provided you with this.
- Next, comes the ‘Invoice Date’ which is again a pre-set field.
- Fill in the ‘Payment Terms’ and ‘Payment Reminder’ as per your policy.
- Fill in the itemized list of items provided, their quantity, price, discount, and tax.
- Check the total amount showing at the bottom of the list and click on ‘Save’ if all information is correct.
- Preview the invoice and click on ‘Send’ to send it to your customers instantly.
Start your free trial now and experience hassle-free invoicing with Billbooks now!
FAQs related to invoice vs bill:
Invoice requests payment and confirms the delivery of the goods or services. Whereas, the bill confirms the payment.
No, issuing an invoice does not mean it has been paid. It is sent as a request to clear the payment, which is usually sent after the completion of the task.
Bill is recorded under the company’s balance sheet statement as a current liability. It specifies the amount that the client owes for the products or services bought on credit.
Managing finances and streamlining the workflow is a major task in a business. Simplifying the payment process is vital as that keeps your cash flow steady and helps you run your business smoothly. Hence, here you get details about the facts related to invoice vs bill for better understanding. Moreover, Billbooks is there to ease up your invoicing and other related processes.