What is the difference between invoices and statements

The invoice also specifies payment terms -- when the money is due to be paid by the customer to the business. A statement is a presentation of the total amount owed by the customer at a given point in time. It is a snapshot of all invoices due by a specific customer as of the statement date. It usually includes information on the customer's previous balance due, most recent invoices and amounts paid during the last billing period.

It may also include "aging" -- the length of time that each invoice has been outstanding. An invoice creates an immediate impact upon the books of the company doing the billing by forcing the business to recognize and record a change in financial activity.

The preparation of a statement, however, generally has no accounting effect upon the business. It is informational. An invoice forces action while a statement is generally used as a reminder. You get a cell phone bill , but you get a credit card statement. Both itemize the charges made to you — so which one is it, a bill or a statement? For example, a bill might have the following items on it:.

This is like a bill or invoice that you might get when you purchase something. Each line item on a statement represents either a bill or a payment. Statements are often sent out on a regular basis e. For example, a statement might have the following items on it:. The best cloud-based accounting websites provide customizable templates for both kinds of sales forms. But each is generally only used in specific situations.

Most small businesses send invoices to customers at least some of the time. They contain purchase details and any sales tax or other charges necessary. When a customer buys something in person and pays you on the spot, you of course issue them a sales receipt. Accounting websites offer tools that help you personalize your invoices, adding logos and modifying their columns and changing field labels, for example. They also let you set up repeating invoices. So if you bill a customer on a recurring basis, you can create a template that can be re-used.

Some applications will even issue the invoices automatically if the amount is always the same or at least send you a reminder. Best-of-breed cloud-based accounting applications automate the process of creating statements.

These customizable forms can serve many purposes.