Have you mistaken a statement as an invoice? You might’ve not noticed it, but many people tend to think that a statement and invoice are both the same. For inexperienced business people, it can get confusing quickly. That’s why in this article, we’re going to fix this misconception. We’re going to differentiate a statement and an invoice and make sure you understand why they are different from each other.
What Is an Invoice?
An invoice is a type of document sent from a supplier to a buyer. This document is accompanied by a shipment of goods or services. It also lists all of the items included in the delivery and the amount that the buyer owes to the supplier.
If you receive a bill, you’re getting a notice that you owe money to someone and that someone wants you to pay. It’s a legal document that issues a bill that needs payment. Through this document, the recipient will be able to know what items they’ve acquired and how much they owe to the supplier. That way, there won’t be any misunderstanding or concern regarding payment.
What is a Statement?
On the other hand, a statement is an up-to-date report on what the buyers still owe to the suppliers on the account. It’s basically the state of a customer’s account over a period of time. For example, your bank will issue a monthly statement regarding your account. It will list all of the transactions that you’ve made throughout that period. Both credits (money added) and debits (money taken away) are taken into account. That way, you will get a full list of every transaction you’ve done with your account. So, it’s not a list of things you owe, but rather a list of transactions you’ve done using your bank account.
Statement vs Invoice in Intent
Invoice and a statement show their differences in the intent of each document. The former serves to ask buyers for payment. It lets the buyer know about the cost of each item included and the communication on why the buyer owes a certain amount of money.
On the other hand, the latter is meant to force buyers to make payments on their accounts. The statement will include the most recent changes made to the account. It also notifies the buyer of any amount owed on previous purchases. It covers the invoice status for a given period, which is sent regularly.
The difference between an invoice and a statement is summed up into a single statement that goes like this:
“An invoice is for requesting someone to pay you. A statement is a collective status of invoices.”
What Do You Find in an Invoice?
A typical invoice includes a few notable elements. It consists of a header with a title at the very top. Along with that are the vendor contact details and a custom name and number. An invoice number is also present for tracking purposes. That way, you will know if it has reached its recipient.
An invoice also includes the date of purchase, product name, number, quantity, and per-unit cost. Everything included in the invoice is itemized according to each good or service ordered. At the bottom, you will find the subtotal for everything that was purchased, the sales tax, and the total amount. There will also be information on payment terms, as well as the payment address.
What Do You Find in a Statement?
A statement isn’t as detailed as an invoice. This document typically features the date of each transaction recorded during a particular period. Some companies filter their statement to only include unpaid invoice amounts. Others, on the other hand, are more comprehensive by showing all transactions. The invoice number and total amount are all itemized on the statement.
The information on the statement will enable customers to match paid and unpaid invoices on the statement to the invoices and receipts they have with them. The statement will also include payment terms and information about how to make them.
An invoice will usually include the date your order was processed or shipped. It also comes with the payment due date. On the other hand, statements will feature the statement date, which refers to the date the statement is finalized and sent to the buyer.
When a bill arrives, buyers should pay balances due regularly instead of waiting for the official statement to arrive. Sometimes, the statement is issued before payment is processed. When you accidentally pay your invoice, you are also avoiding confusion about whether or not a balance has been paid when you receive a statement.
Why Keep Both Documents?
While both serve different purposes, you must keep both the invoice and statement. Since the statement is a broader look at your balance due, you’ll be able to see which invoices are already paid and which ones still need payment.
Once you receive an invoice and make a payment on it, make sure you mark it as paid in your system. Include the date to make sure you have all the information when you need to make a recall. If you are paying via credit card, make sure you keep your credit card statement on hand as it will serve as proof of the payment transaction. If cash, make sure you receive and store the sales receipt for proof of payment. And if you paid via check, make sure you keep a copy of the check. You can keep it in your register, as well as the brand statement on hand for proof of payment.
When you look at your invoices again, you can compare them to the statement that you also have to ensure that everything matches accurately. Suppose your statement indicates that you haven’t paid a particular invoice, but you have proof of payment. In that case, you can easily appeal by going back to the vendor and showing the necessary information. In turn, they will change the status of that invoice to be paid. However, keep in mind that the change will reflect in the next statement. Keeping an invoice on hand will also allow you to make sure that everything you ordered is included. It will also make sure that you’re not being overcharged.
Improve Your Invoicing with Recurring Billing
Whether you’re creating an invoice or a statement, you need recurring billing to help elevate your entire invoicing and billing process. Thanks to people leaning more towards subscription-based businesses for their ease and convenience, recurring billing is on the rise. It benefits both you and your customers, making it a superb billing model that you should consider trying.
Introducing Recurring Billing!
Recurring billing requires no introduction. It has been around for decades. However, with the introduction of recurring billing software in the 2000s and its more recent spread to SaaS businesses – recurring billing is being used by a growing number of companies today.
Get Paid on Time!
The most significant benefit that recurring invoicing offers your business is getting paid on time. By using a recurring billing software like ReliaBills, you can automatically bill your customers at the same regular intervals. That means your customers will never miss a payment even if they forget to input their credit card information (which happens more often than we’d like).
Recurring Billing for Customers!
Having recurring billing also has its benefits from the customer’s perspective as well. With recurring billing, they will never have to manually input their credit card information again. They can set up an account/profile on your website, and the recurring billing software you use will automatically send them invoices at regular intervals.
Why Should You Start Using Recurring Billing?
The recurring billing software industry has been gaining a lot of steam over the past few years. This is largely due to recurring billing being used by more and more businesses, including some high profile companies such as Uber, Netflix, and Blue Apron, among others! In fact, recurring billing is rising, and its usage increases as recurring billing software develop.
Recurring Billing vs. Traditional Invoicing!
Traditional invoicing also has a number of benefits; however, recurring billing offers many more advantages due to the fact that it’s automatic. With recurring billing, you never have to send out invoices manually, and you never have to input your credit card information manually.
Recurring billing is great for recurring payments as well!
Another benefit of recurring invoicing that many people don’t think about is recurring payment schedules. With recurring billing, you can set up a schedule for automatic monthly, quarterly, or even yearly payments depending on the type of recurring billing plan you choose.
How to Get Started With Recurring Billing?
A number of things should be considered when looking at recurring billing tools. Only choose a regular invoicing software that offers the correct type of recurring billing for your business to get started with recurring billing today!
The recurring billing software industry is continuing to grow, and it’s becoming more common for business owners who are using recurring billing. This means that you’ll need to start using recurring billing software soon. There are lots of options. But if you’re still getting started, we’d highly suggest giving ReliaBills a try.
ReliaBills is a simple and easy-to-understand invoicing and recurring billing system that provides all the important tools and features that you need to start automating your billing process. From creating invoices to scheduling recurring payments, you’ll get all the features you need to get started.
For even more features and quirks, you can upgrade to ReliaBills PLUS for only $24.95 per month. You can even cancel any time so that there won’t be too much commitment on your end. If you want to learn more, make sure you check out our dedicated page for recurring billing.
Once you have chosen ReliaBills, it is time to start using it and reap the benefits of automated recurring invoices and payments. Start increasing your cash flow by switching over to recurring billing today with ReliaBills! Click here to get started.
So, there you have it – the difference and correlation between invoice and statement. Invoices and statements are different from each other. However, at the same time, invoices and statements are also related to each other. Keep in mind that while both have their differences, they are still related. That’s why it pays to get to familiarize them, so you will know which is which whenever you encounter an invoice and/or a statement.
For more information about how ReliaBills can help with your invoices, visit www.reliabills.com today.