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 show 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.
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.