What is the difference between a billing statement and an invoice? (2024)

What is the difference between a billing statement and an invoice?

While an invoice relates to a specific transaction, a statement can cover multiple transactions. It's a document used when buyers owe the business money on account. The statement is a current report showing the customer's account status, reflecting payments already made and outstanding invoices.

Is invoicing the same as billing?

A company may send you an invoice for services performed but upon receipt, you see it as a bill. Using the word invoice can imply that payment terms, such as NET-30 days, have been established — whereas a bill is a simple statement of what is due now.

Can I use a statement as an invoice?

"A statement" provides a summary of transactions that occurred within a specific period and serves as an up-to-date report that does not legally bind clients to make payments. In contrast, "An invoice" is a legal document that contains particular transaction data and demands payment.

What is a billing statement?

A billing statement is a monthly report that credit card companies issue to credit card customers showing their recent transactions, minimum payment due, and other relevant information. Billing statements are typically issued at the end of each monthly billing cycle and cardholders can receive them by mail or online.

What is the difference between a billing note and an invoice?

A billing note is a document that reminds a customer to pay by a specific date. It shows the total sum as well as product/service details. An invoice is a document that displays the total cost of products or services and is issued after the project is finished.

How does billing and invoicing work?

A bill is a document received by the customer, which also outlines the products or services rendered by the business. A key difference is that a bill usually implies the need for immediate payment, while an invoice can outline certain terms (i.e., net 30/60/90 days).

What is an example of billing?

Utility bills are a common example of usage-based billing. Quantity-based billing is another type of variable recurring billing. With this model, customers are billed based on a quantity that was agreed upon when they purchased. Volume-based cloud storage services are one example of quantity-based billing.

Is a billing statement a legal document?

While invoicing is an important accounting practice for businesses, invoices do not serve as a legally binding agreement between the business and its client. That's because an invoice leaves too much room for manipulation to serve as a legal document.

What should you not put on an invoice?

Don't Include Your Routing and Account Numbers On Invoices–Here's Why!
  1. Invoice date.
  2. Unique invoice number.
  3. Your business name and address.
  4. Client's name and address.
  5. Brief description of services or goods provided.
  6. Amount.
Apr 19, 2022

Is a billing statement a contract?

Technically, no, invoices alone are not legally binding. Invoices do not equal a legally binding agreement between the business and its client, nor are they considered a legal document. An invoice leaves too much room for manipulation to serve as a legal document.

What is required on a billing statement?

The periodic statement rule requires that all of the following information be included in the billing statement.
  • Amount Due. ...
  • Explanation of the Amount Due. ...
  • Past Payment Breakdown and Transaction Activity. ...
  • Partial Payment Information. ...
  • Contact Information. ...
  • Account Information. ...
  • Delinquency Information.

What is the objective of billing statement?

Providing a record of transactions for accounting purposes

Billing statements serve as financial records for businesses, helping to maintain accurate and organized books. They're used to track sales, revenue, and expenses and are necessary for preparing financial statements, tax filings, and other regulatory reports.

What is the list of billing statements?

What is a billing statement and how can I use it for my business?
  • the date of the original invoice.
  • the type of invoice.
  • the invoice number.
  • a brief description of the products or services provided.
  • the amount of the original invoice.
  • the amount that has been paid for the original invoice.

Should I void or credit note an invoice?

A credit note allows you to add notes as to what happened and to control the date of the credit so you can record the credit in a different date than the invoice. Void treats the invoice as if it never existed. Your choice, however, if the invoice period is locked and reported, use a credit note.

Is an invoice a payment?

An invoice is a request sent by a supplier for payments of goods or services. When goods or services are rendered, the supplier sends an invoice detailing what was provided along with how much is owed, how to send payment, and when it is due.

Who is responsible for billing and invoice?

A Billing Specialist oversees the tasks of sending new invoices to clients and ensuring all outstanding invoices are paid in full and on time. They are client-focused and assist them with any issues with invoices.

Do you have to pay an invoice if the company made a mistake?

If a business makes a mistake on an invoice they have already sent to their customer, they must cancel the invoice with a credit note and then issue a new invoice. The credit note essentially 'pays' the incorrect invoice so there is no outstanding payment.

What does billing an invoice mean?

An invoice contains information about how much money a customer owes. This document is considered an invoice by the business that has provided the goods or services to the customer. The customer who receives this invoice then records this document as a bill that needs to be paid.

What is an example of bill and invoice?

A typical example can be the bill issued after your stay at a hotel which is to be paid before you checkout. So the main difference is that while an invoice is sent (by the seller), a bill is received (by the customer).

What is billing rules?

Billing rules define how your order product produces an invoice line during an invoicing process.

How should a invoice look like?

The design of an invoice depends on the template and format you choose, but it has important elements like your client's and business name and contact details, an itemized list of provided goods and services, invoice number, and so on.

Do invoices hold up in court?

Since invoices are not considered to be legal documents, it shouldn't come as a surprise to read they are not contracts either. That's because an invoice is a request for payment and does not legally bind the client to pay it. A contract, however, is the legally binding document that can be enforced in court if needed.

Does an email count as an invoice?

Your electronic invoices must include the same information as paper invoices. As with paper invoices, it is not enough just to produce an electronic invoice - you must actually send it to your customer. document attachments to emails, such as PDF or XML files...."

Who signs an invoice?

Invoices are usually signed by the seller to confirm the transaction's accuracy, authorize payment, and meet legal requirements. Customer's role. In some cases, customers may sign to acknowledge receipt, authorize payment, or accept additional terms.

What are the common mistakes made while invoicing?

Common invoicing mistakes
  • Not sending invoices promptly. ...
  • Lack of professionalism. ...
  • Incorrect or missing invoice information. ...
  • Adding hidden fees. ...
  • Unclear payment terms and policies. ...
  • Invoicing the wrong customer. ...
  • Failing to provide multiple payment options. ...
  • Not having a digital backup.

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