Invoice and bill have a lot of similarities that make them alike. For instance, both are used for a commercial purpose that mentions the amount to be paid by the buyer. Both these documents serve as proof of purchase, ownership and tax breakdown if any. However, there are a number of differences that set them apart. Here are the differences between bill and invoice that you should know:
1. Basis of receipt
If you are a vendor or supplier who has done the transactions to receive money from customers, you would refer it to as an invoice. Whereas if you are the buyer or customer, the receipt sent to you by the vendor/supplier would be termed as a bill.
2. Difference in purpose
In-spite of the fact that bills and invoice are of similar nature, each has a different purpose. An invoice may be presented before or after the products/services are delivered whereas a bill is presented only after the purchase is made.
3. Immediate payment
Presenting an invoice does not imply an immediate request for payment since payment can be made later. A bill, on the other hand, requests for immediate payment. Hence it is called “billing address” and not “invoice address”. Those in bill management would vouch for the fact.
4. Advance payment
An invoice would mention the amount to be collected in future and any advance payment that has been made. A bill will not mention any advance payment but only the ultimate amount that needs to be collected from the customer.
5. Check warranty
A warranty card is issued separately for a purchase. In case you need to get the product serviced or replaced under warranty, you are required to produce the bill and not the invoice. A warranty is issued against a bill, never against the invoice.
These minor variances make invoice and bill different from each other. While a bill helps you check the warranty and the final amount paid to the vendor/seller, an invoice indicates the possibility of a future transaction. Knowing these terms with the purpose of each would create an efficient and smooth bill management for all.