What Is Difference Between Invoice And Bill?

In everyday life, we tend to use terms like invoice and bill interchangeably. It really does not matter to anyone, as long as things are getting done as expected. However, if we analyze a bit closer, there emerges a clear difference between an invoice and bill. The differentiation becomes all the more important when things are assessed from accounting and legal perspective. For better understanding, here’s a quick look at some of the key differences between invoice and bill.

Invoice vs. bill – Definition

An invoice can be issued by an individual, business or organization. It is sent to the recipient, who is then expected to pay the amount mentioned in the invoice. In case of any issues between the two parties, an invoice can be presented as a legal document. An invoice is also usually stored in hard or soft copy for accounting purposes.

A bill serves a similar purpose, but it is usually presented just before a payment is to be made. Things like credit period and payment deadline is usually not mentioned in a bill. A bill reflects the amount that the customer needs to pay to the vendor. A bill serves as a proof of transaction between two parties. A bill can also work as a reminder that a specific payment needs to be made.


An invoice usually has a proper template based on accounting and legal practices. An invoice will have detailed information about both parties. It includes names, addresses, phone numbers, tax details, issue and due date, and details of amount due. In comparison, a bill usually has limited information about the customer. It has details about the vendor, amount charged and applicable taxes. Bills aren’t necessarily required to follow a specific template.

Unique invoice number

Since they are used for accounting and taxation purposes, an invoice is required to have a unique number. In comparison, bills aren’t necessarily required to have a unique number. Bills may have a number, but its use may be limited to administrative purposes.

Type of transaction

Invoices are usually meant to be used for credit transactions. They are presented to request payment for products already sold or services that have already been provided. The customer is legally required to pay the amount by the due date mentioned in the invoice. In comparison, bills are usually meant for immediate transactions. Some common examples of bills include the bills that you get at supermarkets, restaurants, etc.

Summing it up, invoice is an important document from accounting and financial reporting purposes. It is also treated as a legal document. On the other hand, a bill primarily serves as a proof of transaction.

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