As customers, we must know the difference when we are receiving an invoice and a statement from a supplier. When we receive an invoice from the seller, it is directly related to a specific sale transaction according to provided goods or services. With that invoice, we have all the information needed, before we pay it starting from invoice date and number, item description and price, shipping, sales tax to payment terms.
When receiving an invoice, the seller has made an evidence of the sale to us, whether the payment was made in advance or cash. One of the most important details of creating an invoice that can’t be missed is when a payment was made at the time of the sale, the invoice should be stamped “PAID” before it should be delivered to the buyer.
“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.”
On the other side of the finance world, exist billing statements. When the seller issues a statement, that document consists of all the invoices that haven’t been paid by the buyer. The statement intends to remind the buyer that he has an obligation to pay the seller. Since the statement provides less information than the invoice, it consists of the statement date, invoice numbers, dates and totals.
Now that we have pointed the main difference between an invoice and a statement, we can provide you with some extra information about them:
- Invoices are issued every time a sale has been made, so they can be issued every day and in different quantities.
- If you are writing a more sophisticated statement, you will manage to aggregate invoice totals by time bucket, so each of the invoices with overdue will be shown clearly.
- Statements are issued at regular intervals, usually once a month
- The receipt of an invoice is an accounting transaction and the statement is strictly informational
At the end of the day, in the finance world, we spent all our time looking backwards, reporting on what happened. Can I book it? What are the numbers? But now it's about looking into the future. It's about planning and integration. The role of finance is now that of a partner in the business.