Is an invoice the same as a Bill?

By Annapoorna


Updated on: Nov 9th, 2021


3 min read

Under invoicing, both invoice and a bill contain details about the money owed by the buyer to the seller for the sale of goods or services. In the normal course of business, the word invoice is used by the seller of goods. The buyer often uses the word bill to refer to payments made to the seller immediately upon the completion of the transaction.

Meaning of an invoice and its use

An invoice refers to an accounting document issued by a business to its customers containing details about goods sold or services provided and the amount charged for the same. It is a legal document that is to be prepared in a specific invoice template.

Use of an invoice

  • It serves as a record of the goods sold or services provided. It serves as a legal document for record-keeping purposes. 
  • The seller uses it to request payment to the buyer by a specified deadline.
  • The company uses it to keep track of sales made. 

Meaning of a bill and its use

A bill states the amount owed by a customer to the vendor. Both invoice and bill contain the same information regarding the business transaction. Still, the word invoice is used by the provider of services, whereas the customer records the same as a bill against which payments are to be made. It serves as proof of transaction. Some of the common examples of billing are billing done at supermarkets, restaurants, etc.

Uses of a bill

  • A bill is issued before payment is made.
  • It serves as a record for the buyer of goods regarding its purchases.
  • It also serves as a reminder for payments to be made.

Comparison between an invoice and a bill

Bill is a generic term for documents, whereas the invoice is a specific term. Some of the differences between an invoice and a bill are discussed in the below table:

ContentsThe invoice contains customer information.

Invoices are issued in a specified invoice template containing specific details such as invoice number, date of issue, due date, business name and contact details, customers contact details, tax details, amounts due, etc.
Bills usually don't contain customer information.

Bills contain limited details such as the amount charged for the sale, including any taxes charged on the same.
Unique invoice numberInvoices are assigned a unique invoice number for accounting and tax purposes.Bills aren't numbered. Even if they are numbered, it doesn't have significant legal importance as it is used only for the businesses’ administrative purposes.
Type of transactionInvoices are usually used for credit transactions with specific due dates for payment. They are used to request payments from their customers for goods already sold or services already provided.Bills are issued for cash transactions that are completed in one go.
For example, when Mr X has dinner at a restaurant, he will be issued a bill to be paid upfront.
PurposeIt is a legal document used for financial reporting.Bill serves as proof of transaction.
About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

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Quick Summary

An invoice and a bill both contain details about the money owed by the buyer to the seller. An invoice is used by the seller, and a bill is used by the buyer. They serve as legal documents. Invoices are used for credit transactions, while bills are for cash transactions. Both serve as records of transactions and reminders for payments.

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