In this article, we will explore the differences between an invoice and a statement. Read on to learn more.
A statement is a summary of what you owe for a service or purchase over a specific period. It shows your charges, payments, and the total balance due, making it easy to track and pay your bills.
Example: For example, a streaming service’s billing statement might show your Standard Plan charge of $15.49, a $5 late fee, and a total balance of $20.49 to be paid.
Here are some of the distinct qualities of a statement:
A billing statement provides an overview of all account activity within a specific time period. This includes outstanding balances, payments made, and any fees or adjustments.
Statements show the total amount owed by the customer, including balances carried forward from previous periods. This helps customers and businesses track long-term account activity.
Billing statements include a record of payments made during the billing cycle. This transparency helps customers verify their transactions and ensures accurate record-keeping.
Statements act as periodic reminders for customers with unpaid balances. They often include a "minimum payment due" or "total due" to encourage timely payments.
Statements offer a comprehensive snapshot of the customer's account status, making it easier to review all transactions in one place. This is especially useful for accounts with ongoing activity or recurring charges.
An invoice is a document a seller sends to a buyer to request payment for goods or services. It lists what was provided, the cost, and payment details to make the transaction clear.
Example: For example, a laptop company invoice might show the purchase of a Latitude 5430 laptop for $1,200 and a $50 shipping fee, totaling $1,250. It includes payment instructions and a due date.
Here are some of the distinct qualities of an invoice:
An invoice is a formal request for payment sent after goods or services have been provided. It outlines the exact amount owed and often includes a due date for payment.
Invoices provide a breakdown of the products or services rendered, including descriptions, quantities, and prices. This level of detail ensures transparency and prevents disputes.
Invoices specify payment terms, such as due dates, acceptable payment methods, and any late payment penalties. These terms help set clear expectations between the business and the customer.
Each invoice is typically tied to a specific transaction or order. This makes it easier to match payments to individual purchases.
Invoices are often considered legal proof of a transaction and can be used in disputes or for tax purposes. They serve as a formal record of what was sold and the amount owed.
The issuance of an invoice is the starting point for a customer’s payment process. It prompts the customer to fulfill their financial obligation for the transaction.
Statements and invoices may seem similar but they serve different purposes. We will explore these differences below.
We hope that you now have a better understanding of the main differences between a statement and an invoice. If you enjoyed this article, you might also like our article on sales order vs invoice or our article on the difference between a quote vs invoice.