What Is the Difference Between Billing and Invoicing?

 

Bills Vs Invoices

Bills or invoices are often used interchangeably in the business sector. While both of them are more or less on similar lines, there are some key characteristics that differentiate one from the other. Let’s take a look at each of these in detail!

Bills – Definition

A bill is nothing, but the money owed by a customer to a business for a purchase transaction. It could be both physical or digital in nature, depending on the requirement. Some of the key characteristics of a bill are:

• It is issued to the customer before the payment
• It records the transaction between both the parties for the product/services rendered
• When a bill is issued by a party, it must be paid by the customer.

Invoice – Definition

Invoice is a detailed document of a particular goods/service transaction. It is issued to a client by a supplier, detailing out the respective transaction along with the details of money that is owed for the said work. Some of the key characteristics of an invoice are:

• It is issued requesting payment before a particular deadline
• It is a business transaction requiring payments from a client for services rendered
• It serves as a record for businesses to track its payments

What are the differences between billing and invoicing?