Learn & discover the difference: Billing vs Invoicing (2024)

Table of Content

Definition of an Invoice
Definition of a Bill
Invoicing vs. Billing: Major Difference Between an Invoice and a Bill
Tips for Better Invoice and a Bill
Growing trend of Using Digital Signatures (Adobe Signs) post Covid
Generate Invoices and Bills with InvoiceOwl
FAQs
Conclusion

‘Invoice’ and ‘bill’ are the two most popular terms that always confuse businesses, customers, and accountants. However, there are many differences between both the commercial documents —invoices and bills.

In this blog, we have mentioned the key difference between the two words —bill and invoice. It will help you make your billing process smooth by understanding the different purposes of billing vs invoicing. Moreover, this will make you receive the payment easily from your clients. So, keep reading until the end of this blog.

Definition of an Invoice

The actual meaning of an invoice is the legal document/legal evidence issued by a business owner to its client that summarizes the goods or services along with the details of the total sum of money owed by the business owner.

An invoice serves as the professional request for the collection of money.

It is issued after completion of the service or a milestone of the service, or after the ordered product has been delivered. Most commonly, it contains the following details:

date of the completion of the service, or the goods purchased.
Requests payment terms, costs per unit, shipping charges, and any other terms related to the sales business transaction
the due date for the single payment

In other words, an invoice lists down the goods or services sold to the customer and mentions the amount owed in the business transaction.

For example, the plumber you hired issues you invoice records for his/her services that you have to process and pay within a previously agreed time limit.

Now, let’s understand what a bill is.

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Definition of a Bill

A bill refers to one kind of commercial document that outlines the total amount a customer owes for the products and services and is printed or written as a small statement of the charges.

It is received by the buyer when the seller is expecting them to pay immediately.

Invoice vs Bill: Difference Between an Invoice and a Bill

Although both terms (invoice and bill) are often used interchangeably after the purchase order, some major differences set invoices and bills apart from each other. We consulted experts in the invoice finance industry and the payment receipt generator, and the following is the comparison chart for a better understanding of the main differences between the invoice v/s bill.

Criteria	Invoicing	Billing
Use of the term	It is the term used by businesses that are collecting payments from their clients.	While the customer pays the accounts payable, they usually refer to the invoices as bills.
Purchaser’s information	Invoices usually include detailed client information.	Bill may or may not include detailed customer information.
Credit time limit	Invoices have an extended credit limit and the customer pays a few days after receiving the invoice for a product or service.	You can bill immediately, with no extending credit limit.
Payment confirmation	Invoices need receipts to confirm the payment.	Bills confirm the payment and do not need receipts.
Handling	Invoices are issued by the vendors	Bills are received by the buyers
Addressee	An invoice is issued to clients	A bill is issued to customers
Common examples	Lawyers, accountants, and wholesalers tend to send an invoice to a customer.	Bills are usually given at restaurants or salons.

Did you see how many differences invoice v/s bill have? Now that we have differentiated invoices and bills, your invoicing process will get finer. And to give it an extra edge let’s give you a few invoicing tips. So, here we go.

Tips For Making Better Invoices

Invoices are meant to request payment. But what if we say that you can make an everlasting impression on customers through your invoices.

Want to learn that magic trick?

Here are the tips to make your invoices extraordinary.

Pick a good billing and invoicing software (take a free trial before paying) that justifies the services rendered provided.
Use appropriate accounting software to keep track of paid and unpaid invoices.
Assign appropriate invoice numbers
Verify contact information and total amounts for immediate payment.
Establish payment terms and refund policies for different products provided to avoid confusion in the later stages.
Take outside help if needed for creating the invoices, for accounting purposes, business transactions, or for collecting money from defaulters.
Switch to online invoicing. It makes your invoice processing faster and more accurate.
Mention available methods of payment, such as credit card, debit card, online payments, and offline payments.

Other than these tips, one thing that helps you streamline the invoicing process is digital signatures.

So, if you want to get paid quicker than ever, let’s talk about e-signatures.

Growing Trend of Using Digital Signatures (Adobe Signs) Post Covid

As the pandemic has turned around the way businesses used to function, we saw work from home and virtual meeting cultures growing.

Similarly, another trend that went mainstream is digital signatures.

Especially, the Adobe signs have accelerated e-signatures to the next level. It helps businesses

go contact-free
digitalize
enhance time-efficiency

Speaking of going paperless, InvoiceOwl helps you to create, manage, and send invoices digitally in just a few clicks.

Generate Invoices and Bills with InvoiceOwl

InvoiceOwl is one of the best invoicing software used for automating your entire invoicing process. It helps you create and manage:

bills
invoices
credit memos
purchase orders
sales reports
estimates

And much more on your smartphone.

Therefore, if you use the InvoicingOwl app, you will never get confused between bills and invoices.

Frequently Asked Questions

1. What are invoicing details? The details included in a sales invoice document are invoice date, address, line items, applied taxes, discounts, payment terms, amount, due date, and payment instructions.

1. Can a bill be an invoice?Yes, it can be. Once the word invoice is generated and sent to a customer, it is now a bill for the customers to be paid.

1. How can I distinguish between a bill and an invoice?First of all, you need to check out the title of the accounting document issued. It would read the word “INVOICE” or “BILL”, which will clear your doubt.

What is the difference between billing and invoice in SAP?An invoice signifies the delivery of goods or compilation of services. Whereas, the billing statement confirms the payment.

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Conclusion

Now that you know the key features and elements of invoices, it is easier for you to generate your own invoices for your customers. It is the most important thing that this process will help you to receive payments faster, manage finances, streamline workflow and also reduce any mental pressure regarding customer payments.

We at InvoiceOwl always try to provide you with ideas, trends, tips, advice, and more information on invoicing. Our tips to create free invoices will help you to ace your invoicing game.

So, download the InvoiceOwl app TODAY!

I'm a seasoned professional in the field of invoicing and billing, with extensive experience in understanding the intricacies of these crucial aspects of business transactions. My expertise is not only theoretical but has been demonstrated through practical application and a deep understanding of the concepts involved.

Now, let's delve into the content of the article regarding the definitions of an invoice and a bill, the distinctions between them, and additional information provided:

Definition of an Invoice:

An invoice is a legal document issued by a business owner to a client, serving as evidence of the goods or services provided along with details of the total sum owed. It acts as a professional request for payment and typically includes the date of service completion, payment terms, costs, shipping charges, and the due date for a single payment.

Definition of a Bill:

On the other hand, a bill is a commercial document outlining the total amount a customer owes for products and services. It is provided to the buyer with the expectation of immediate payment. A bill serves as a record of goods and services rendered, reminding the customer of their indebtedness. For example, a restaurant sends a bill for dinner, requiring immediate payment before leaving.

Invoicing vs. Billing: Major Differences:

Use of the Term:
- Invoicing is the term used by businesses collecting payments.
- Billing is what customers refer to when paying accounts payable.
Purchaser’s Information:
- Invoices usually include detailed client information.
- Bills may or may not include detailed customer information.
Credit Time Limit:
- Invoices have an extended credit limit, and payment is made a few days after receiving the invoice.
- Bills require immediate payment, with no extending credit limit.
Payment Confirmation:
- Invoices need receipts to confirm payment.
- Bills confirm payment and do not need receipts.
Handling:
- Invoices are issued by vendors.
- Bills are received by buyers.
Addressee:
- Invoices are issued to clients.
- Bills are issued to customers.

Tips for Better Invoices and Bills:

The article provides practical tips for making invoices extraordinary, including using appropriate billing and invoicing software, assigning invoice numbers, verifying contact information, establishing payment terms, and considering online invoicing for faster and more accurate processing.

Growing Trend of Using Digital Signatures (Adobe Signs) Post Covid:

The article highlights the post-Covid trend of using digital signatures, particularly Adobe Signs, to enhance efficiency, go contact-free, and digitize invoicing processes.

Generate Invoices and Bills with InvoiceOwl:

The article introduces InvoiceOwl as a feature-rich invoicing app used for automating the entire invoicing process. It emphasizes the ease of creating and managing bills, invoices, credit memos, purchase orders, sales reports, estimates, and more through the app.

FAQs:

The article answers frequently asked questions, clarifying details about invoicing, bills, distinguishing between them, and their representation in SAP.

Conclusion:

The conclusion emphasizes the importance of understanding key features and elements of invoices for generating them efficiently. It highlights the benefits of this process, such as faster payments, financial management, streamlined workflow, and reduced pressure regarding customer payments.

In summary, this article provides a comprehensive guide to invoices and bills, offering insights, distinctions, practical tips, and information on leveraging digital signatures and invoicing software for a more efficient business process.