Billing vs Invoicing: Learn More About The Differences

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‘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.

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.

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.

  • Businesses send a bill before the payment to get paid faster.
  • A bill serves as a record of goods and services rendered sold rendered as a reminder of one party’s indebtedness.
  • When a customer receives a bill they need to make a payment immediately.

In other words, the term bill means the document received by customers that informs about the total amount to be paid on the spot.

For example, any restaurant sends you the bill for dinner and you have to pay for it before you leave the restaurant.

Now that we have understood both the invoice and bill, let’s keep them side by side and spot the differences.

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

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.

  1. 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.

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!


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!

Author Bio
Jeel Patel
Jeel Patel

Jeel Patel is the founder of InvoiceOwl, a top-rated estimating and invoicing software that simplifies the invoicing and estimating processes for contractor businesses. Jeel holds a degree in Business Administration and Management from the University of Toronto, which has provided him with a strong foundation in business principles and practices. With understanding of the challenges faced by contractors, he conducted extensive research and developed a tool to streamline the invoicing and estimating processes for contractors. Read More

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