By Judith Cross - March 10 2018 05:24:13
An invoice is a pillar of the sales process. It is the main document that serves as a bill for the service or products your business has provided. A properly created invoice is a legal document that provides a binding agreement.
A bill is a request for payment. A bill is usually considered from the customers standpoint. It is common to receive a bill without an invoice, as in a restaurant or retail store. A bill is usually given with the expectation of immediate payment.
Invoices may be mailed or emailed or faxed to a customer. When a customer pays, the invoice number should be noted on the sales receipt and matched to the sales receipt in your accounting software, so it is clear that the invoice has been paid. The payment takes the outstanding amount out of your accounts receivable account.
Invoices are sometimes confused with purchase orders. Purchase orders (POs) are before the transaction, and invoices are after the transaction. Purchase orders record an order by a customer to a vendor or supplier.
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