Billing vs. Invoicing: Which One is Best for You?

Earning money and paying bills is the main motivator that makes people work. If there are no bills to pay at the end of every month, many people will happily quit work. As a business owner, you might be sending out bills at the beginning of every month or you might send out invoices. But, do you know the difference between billing vs. invoicing?

‘Invoice’ and ‘bill’ are the most popular two terms that always confuse businesses, customers, and accountants. However, there are many similarities and differences between both invoices and bills. In this blog, we have mentioned the difference between bill and invoice. It will help you make your billing process smooth, and you get paid 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 issued by a business owner to its client that summarizes the products and services along with the details of the total amount of money they owe for the work. An invoice provides the following details:

  • It includes details for requesting payment from a client.
  • It provides detailed information on payment terms, costs per unit, shipping charges, and any other terms included during the transaction.
  • It is issued before the payment is received.

Try our free online invoice generator today!

Whether your business is in construction, landscaping, consulting, photography, auto repair, or the medical field, invoicing takes way too long. That’s why we’re here. InvoiceOwl makes your invoicing faster and simpler so you can get paid promptly and without the hassle.

Get Started Now

Definition of a Bill

A bill is one kind of 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.

  • A bill is issued before the payment is sent to get paid.
  • A bill provides a record of goods and services rendered as a reminder of the owed payment.
  • When a customer receives an invoice bill they need to make a payment immediately.

Invoicing vs. Billing: Major Difference between Billing and Invoicing

Although both terms are often used interchangeably after the purchase order, some key differences set invoices and bills apart from each other. We consulted experts in the invoice finance industry and the following are the major differences between the two.

It is the term used by businesses that are collecting payments from their clients.Clients usually refer to the invoices as bills when they are making the payment.
Invoices usually include the name and address of the customer.Bills are usually general in nature and just contain the amount and details, without any personalization factor.
Invoices have an extended credit limit and the customer makes the complete payment a few days after receiving the invoice for a product or service.Bills are mostly paid upfront and immediately, with no extension on the credit limit.
Lawyers, accountants, wholesalers tend to send invoices to their clients.Bills are usually given at restaurants or salons.

Tips For Making Better Invoices

  • Pick a good billing and invoicing software (take a free trial before paying) that justifies the services provided.
  • Use appropriate invoice numbers, contact details, and total amounts to have immediate payment.
  • Establish payment terms and refund policies to avoid confusion in the later stages.
  • Professional and error-free invoiced designs should be used to help you create a better impression on your customers.
  • Be polite and use words like thank you and please. For example, you can include sentences like, “Please make the complete payment within 15 days. Thank you for your cooperation.”
  • Take outside help if needed for creating the invoices, for accounting purposes, or for collecting money from defaulters.

Frequently Asked Questions

1. What are invoicing details?

The details included in an invoice document like date, address, line items, amount, and taxes.

2. What is the process of invoicing?

Invoicing process is the entire process that business owners implement when generating invoices for their clients or customers.

3. How long do invoices take to process?

Business owners can set up their own terms, provide discounts for early payments and a penalty for late payments. However, if no terms are there between the businesses and the client then the payment should be made within 30 days.


Create Professional Invoices Online Easily and Keep On Top of Your Finances

InvoiceOwl is a feature-rich invoicing app that helps small businesses, freelancers and contractors to create invoices on-the-go and get paid quicker!

Get Started for FREE

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 payments.

We at InvoiceOwl always try to provide you with more details on invoicing. By using our tips for creating better invoices, it becomes possible for you to send correct details to your customers.

Sign up for weekly updates from InvoiceOwl.