Understanding the Difference Between Invoices and Bills With Definitions and Examples

Is invoice the same as a bill

The terms ‘Invoice’ and ‘Bill’ fall under the same category but with a minor difference in their use. Explicitly talking about an invoice shows the due payment for business clients with terms of payment and details of products and services. Whereas, a bill shows the payment business needs to pay its suppliers. Both terms are standard in business transactions but have their respective uses by different parties.

This article covers:

Invoice Definition:

An invoice is a list of products and services with the statement of the sum due for the clients. It is an accounting document which a business needs to send its client for receiving due payment as a payment reminder.

It serves the following purposes:

  • It is a business transaction for requesting payment from clients for goods and services.
  • It highlights the deadline for due payment along with payment terms.
  • It enlists the goods or services it provides to the customers for record-keeping, along with their detailed descriptions.

Bill Definition:

A bill is a document having a statement of charges for providing goods and services to customers for sale.

It serves the following purposes:

  • It is to issue before receiving the payment.
  • It serves as a record of goods and services for the customer and reminds them of the payments the business owes.
  • You record the invoice (from a supplier to business) as a bill in your accounting books.

What’s The Difference Between An Invoice And A Bill?

An invoice and a bill serve the same purpose: to record business transactions. If a business issues an invoice to its customers, it records it as an invoice, but the customer receiving an invoice will record it as a bill.


The business sends an invoice → customer records it as a bill→ customers make payment → the business issues a receipt as proof.

What’s The Difference Between An Invoice And An Estimate?

An invoice and an estimate are almost the same with similar information but with a minor difference. An invoice asks for due payment from the clients, but an estimate offers a quote for future services and highlights their costs.

An InvoiceAn Estimate
It is to issue due payments.It is to highlight the costs of future services clients can buy in the future.
It presents the client with a billing document after the completion of the deal. It provides the client with estimates in advance before finalizing any deal.

An Estimate provides:

  • Information on the services for clients
  • The project details and its scope
  • Timelines and date of completion of projects
  • An estimate of payment the client will owe on buying the services.
  • Job-specific terms and conditions.

What’s A Quote?

A quote and an estimate are almost the same, but the only difference is that; Quote provides the client’s exact payment if buying any service. On the other hand, an estimate gives the estimate of payment the client will pay for buying any service in the future. A quote is valid for 30 days after its issuing day because the prices of goods or services may fluctuate with time.

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