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Billing Vs Invoicing | What's The Difference?

Matthew Lekoutovich
May 31, 2022
Billing Vs Invoicing

Billing vs invoicing... The age old question.

The terms invoice and bill are used interchangeably by businesses and customers. This is because both documents identify goods and services delivered to customers. 

These terms are 2 sides of the same coin, used by different parties in the same transaction

In this article we’ll go over the factors that distinguish bills from invoices. As well as their importance and use in business. 

This article will cover the following: 

When Is The Term “Invoice” Used

Invoice is a term used by a business looking to collect money from its clients. For example, after mowing your lawn a landscaping company will issue an invoice . 

When Is The Term “Bill” Used

Customers use the term bill to refer to payment they owe for goods and services. For example, the same invoice from the landscaping company would be referred to as a bill. 

What is an Invoice?

Invoices are commercial documents that summarize the amount due for services rendered. They provide customers details on the goods and services provided. 

Companies issue invoices after the goods or services are delivered. It's issued to request payment with a specified payment term. A Payment term describes the date on which the payment is due. Payment terms are necessary with invoices as cash is not received immediately. 

elabs invoice

Invoices provide businesses with a record of the goods or services sold. Companies use this information for record keeping & accounting purposes.

Invoice Components:

  • Invoice number
  • Name and description of the product of service
  • Cost per unit
  • All customer contact information
  • Payment terms


What Is a Bill?

Bills state how much money the customer owes the company. This document specifies how much a consumer owes for goods and services that he or she received. The statement shows the total amount the consumer owes.

Bill & Invoice - Key takeaways

Invoices and bills convey the same information about the amount owed as part of a business transaction, but an invoice is generated by businesses that provide services, while customers receive invoices as bills to be paid. This is just a matter of who is referring to the document. 

We can illustrate in this example. 

  1. A business renders a service to a customer, and issues an invoice.
  2. The customers receive a bill
  3. The customer pays the bill

Good accounting invoicing software will simplify payment collection.

An electronic billing and invoicing software like eLabs can make it easy to issue these documents and automate payment collection. Click here to book your demo and simplify recurring payment management for your business!

What is a Receipt

The invoice is used as a request for payment, whereas the receipt serves as proof of payment. Receipts serve as confirmation of payment for goods and services. As well as proof that the customer received what they paid for.   

What is a receipt, issue a receipt

Providing a receipt is not required by law. Yet, in almost all transactions businesses provide their customers with receipts. 

Companies issue receipts to their customers in either physical or electronic form. Brick and mortar storefronts usually print receipts. While e-commerce stores often issue receipts digitally.



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