Bills vs. Invoices: Their Meaning And Key Differences 

January 2, 2023
Procurement Management

When you purchase goods from a supplier, do you receive a bill or an invoice? What is the name of the document that you send out to your buyers when requesting payment? What exactly is the difference between bills vs. invoices?

Although they appear to be the same, “bills” and “invoices” are actually different. Let's find out what those differences are.

Meaning of an Invoice and Its Use 

An invoice is a legal accounting document issued by a vendor to their customer, outlining the products and/or services provided to them by the vendor.

The invoice lists the date of the product/service provision, the cost of the product/service, and the due date by which payment should be made. Essentially, it is a commercial statement requesting money from a company’s customers. 

Free Printable Construction Invoice Template

 (Image Source)

Uses of an Invoice 

The invoice fulfills a few key tasks: 

  • It acts as legal evidence about one party seeking the paid services of another party.
  • It informs customers of the payment they owe for the services they received from the vendor.
  • It acts as a formal record of all things the vendor has given the customer as part of the purchase contract. 

Meaning of a Bill and Its Use 

A bill is another accounting document that acts as a reminder to customers who are receiving the products/services that they have to pay a certain amount to the supplier.

A bill sent to the buyer may contain the same/similar product types recorded for payment. Or, it may contain various purchases a customer made from a single vendor, irrespective of the product/service. 

printable receipt template

(Image Source)

Uses of a Bill 

A bill helps companies in the following ways: 

  • It acts as legal proof of transaction for buyers.
  • It records an itemized list of products/services they have purchased from a seller.
  • It helps ensure the buyer makes payment first before receiving and using the products/services. 

Comparison Between an Invoice and a Bill 

Superficially, both invoices and bills appear to be the same because they are both accounting documents that represent payment for products/services provided by one party to another.

However, when we consider bills vs. invoices deeper, we see some obvious differences. Let us consider these differences: 

  • Who Sends and/or Receives the Document 

Depending on which party sends and/or receives the document – buyer or seller – the bill becomes an invoice, or an invoice becomes a bill.

When the seller sends the document, it is considered an invoice. It is their detailed record of the goods/services they have provided to customers and the payment terms to which customers need to adhere to.

When the buyer receives the document, it is considered a bill. This is because this document is a charge slip that is handed to buyers with the expectation that they will make the payment to the seller according to the terms set out in the document.

For example, say you are a construction company that has bought sand from suppliers. The sand suppliers send you an invoice for the sand they sell you. To you, this is the bill that outlines what you need to pay the sand suppliers and by when.

Now, let’s say you’ve built a commercial property and a co-working company purchases the building from you. You send them an invoice for the sale of the property, and they receive it as the bill they need to pay.

 The Nature of the Information Within the Document 

In some cases, the type of information listed in bills and invoices is different.

Invoices often have detailed information about every transaction performed between the supplier and buyer. It will include information like:

  • Supplier business name and address.
  • Buyer business name and address.
  • List of items purchased.
  • A detailed description of what each item entails.
  • Cost of each item purchased.
  • Date of purchase for each item.
  • Pending payments from previous invoices.
  • Excess payment subtracted from previous invoices.
  • Discounts or offers availed.
  • The total cost of the entire invoice.
  • Methods of payment agreed upon.
  • Last payment date.
  • Delayed payment penalties.
  • Invoice number.
  • Date of invoice issue.
  • Terms and Conditions. 
  • Other relevant information. 

A bill, however, typically isn’t as detailed. Often, bills contain information like:

  • Name of the supplier.
  • Name of the buyer.
  • List of items purchased.
  • Cost of items purchased.
  • Discounts/offers availed.
  • The total amount owed.
  • Bill number. 

Typically, this bills vs. invoices difference occur because of two reasons:

  • The bill is generated after an invoice is sent to the buyer and accepted by them.
  • The invoice typically has a future payment date listed, while a bill is expected to be paid immediately. 
  • Frequency of Transactions 

The final bills vs. invoices difference are the frequency with which they are issued.

Invoices can be generated multiple times within a specified period, even if the purchase contract isn’t completely finished. In contrast, bills are generated when the contract finishes in a single transaction.

When invoices are recurring, they can be issued monthly or even multiple times in a month. More importantly, there is some flexibility in terms of how payments can be made.

For example, buyers may choose to pay more than what the invoice amount states and that excess payment may be carried forward to the next invoice and subtracted from the total owed to the seller.

Even sellers may raise invoices for certain items at one time while raising another invoice for other items separately.

A bill, on the other hand, typically indicates a single-time transaction. It lists a cumulative list of items bought and the amount pending.

There is no option for bill recurrence, and payment is expected for the bill either immediately upon receipt of the bill or within a designated timeframe.

For example, if you seek ongoing products/services from a supplier, such as monthly website hosting or annual equipment leasing, you typically receive recurring invoices.

However, if you have sought just a one-time plumbing service for your business, then you will receive a bill. 


Ultimately, when it comes to bills vs. invoices, having a powerful vendor and invoice management software can be incredibly helpful. An invoicing or bill software can supercharge your business by allowing you to:

  • Manage vendors and buyers with ease.
  • Monitor your purchases and pending payments.
  • Seamlessly raise invoices.
  • Send invoices to specific vendors directly.
  • Quickly and safely pay bills.
  • Schedule recurring payments.
  • Save receipts of payments made in a secure location.
  • Prevent misplacement of payment documents.
  • Search through payment records to identify discrepancies.
  • Identify cases of payment fraud.
  • Provide complete transparency to all parties regarding payments.
  • Meet purchase contract terms and business compliance. 

At Hubler, vendor management software and invoicing software are designed to support the payment management needs of start-ups and SMEs.

It's super easy for your team to create invoices, bills, and any other payment documents you need.

The detailed analytics report on the platform helps you monitor your daily, monthly, quarterly, and annual invoicing transaction volume.

There is also an on-platform help desk feature that allows you to provide technical support to users whenever they need it.

Contact Hubler today to schedule your demo.  

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