What Is the Difference Between Billing and Invoicing?admin_logicfusion
What is a Bill?
A bill is a commercial record that requests the buyer’s immediate transaction of money to the seller. The statement serves as a record that proves the successful transfer of the transaction. They are usually issued by retailers who refuse to accept credits. A bill payment is made wholly at once. Bills provide only limited information about the customer and taxation.
You go for dinner to a nearby restaurant, have your food and finally receive a print requesting the immediate request for the payment. This print you receive is a bill.
Types of Bills
- Billing on Completion: It is the most popular type, and the payment is made after the service or purchase.
- Prorated Billing: This charges per day from the customers. It encourages the customers to avail the service being free of any additional charges.
- Billing for on-going services: It’s the continuous flow of cash from the client to the dealer weekly or monthly for certain subscriptions and plans.
What is an Invoice?
An invoice is also a commercial document requesting payment with a detailed description of the dealer’s purchased goods and services. Unlike bills, invoices are documents proving the purchase made under a contract of installments or credit. They provide documentation of the customer, dealer, contact details of both the parties, the unit price of the purchased goods accompanied with the total cost, billing date, due date with an invoice number to track the particulars on their requirements.
You may have shopped from Myntra or Amazon and received a print with the particulars of the product purchased. It is an invoice. It is proof of your purchase.
Types of Invoice
- Standard Invoice: It is the commonly used kind of invoice with the client and dealer’s detailed description.
- Commercial Invoice: They are issued when the business deal is conducted internationally. It includes shipment quantity, weight, goods description, payable amount, and packaging format.
- Pro-Forma Invoice: It provides an estimated amount of the purchased products and is issued before the purchase or service.
- Final Invoice: The final invoice is sent to the client for the payment request by completing the dealing.
- Past Due Invoice: It is sent if the client fails to make the payment by the due date. It includes the payment details along with the interest or late fine.
How do Bills and Invoices differ?
- Bills are immediate requests for money while invoice lists the details of the purchased products.
- Bills are issued before your payment. On the contrary, invoices can be received before or after the purchase recording your purchase of goods from the dealer.
- A bill records limited details of the customer, while an invoice covers all the customers’ adequate information.
- A bill is issued after the utilization of the product. An invoice can be given before the product reaches you.
- Bill is a written or printed statement focusing on the amount to be paid to the customer, while an invoice is the list of the provided services with its amount.
- The invoice indicates the pending payments and the established connection to the dealer. A bill ends the financial links between the buyer and seller.
- Invoice helps the dealers at times of internal controls and audits, but a bill serves no purpose.
Are Bills and Invoices Interchangeable?
Bills and invoices are similar but not interchangeable terms. They are identical only in the sense that both represent a financial document and are requests for money.