Not too complicated, right? This simple financial vocabulary allows everyone to understand where their money must go and what obligations they have to suppliers, customers, or businesses. In short, an invoice means you are requesting money, and a bill means that you are required to pay for something. When you send an invoice to a customer, the customer then receives it as a bill- it’s all about the perspective. “You billed me for two hats, but I only ordered one.”Īn invoice is sent, while a bill is received. Even if you email it, there is a sense of the bill being a sealed document as long as that mail account is protected. If you print the bill and mail it, your customer will receive a sealed document. Your vendor sends you a bill that you will then pay. That became the Anglo-Norman French word bille, which morphed into the English word bill. The word bill comes from the Medieval Latin word bulla, meaning sealed document. The invoice lists and describes whatever was provided, while also establishing the requirement and deadline for the consumer to pay their bill. In short, an invoice is a breakdown of costs that is sent from the provider of a product or service, to the consumer. Jones for the hat she ordered?” If you want to be paid for that hat, you better make sure you invoice her. Well, that makes a lot of sense, doesn’t it? You send an invoice to your customer because you want them to pay you. Invoice comes from the Sixteenth Century French word envoyer, which means to send. By avoiding confusion and long explanations, “bill” and “invoice” ensure that you and your customers or suppliers can communicate efficiently. Secondly, it saves time in communications. First of all, it ensures that there are concrete terms to be used and understood on both ends. When it comes to a business relationship, having these two words accomplishes two important functions. Two different words are needed to help two different people communicate- it’s all about perspective. “One man’s invoice is another man’s bill.” The same can be true in accounting, with bills and invoices: These popular sayings serve to explain that most of what we experience in life is subject to our perspective. “One man’s ceiling is another man’s floor.” “One man’s trash is another man’s treasure.” They are actually describing pretty much the same thing! So, why use two different words? Invoice and bill are a great example of the importance of words and communication. What is the Difference Between an Invoice and a Bill? Let’s take a look at the distinct differences between an invoice and a bill and why it matters so much. After all, a misunderstanding can lead to disaster as it can cause you anything from a mere headache to major financial loss. bills, it can get a bit tricky to understand what the difference is between the two documents and when to use either one. Business owners have an obligation not only to their customers, but to themselves, to develop literacy with the financial instruments they will use every day.
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