What’s the difference between a bill and an invoice?

Table of Contents

1. What is an Invoice?
2. What is a Bill?
3. Invoice vs. Bill: Main Differences
4. Best Practices for Invoicing and Billing
5. Invoicing and Billing with NetSuite, WooCommerce, and Sage
   
   

Key Takeaways

• An invoice is a formal payment request issued by a seller with detailed transaction information and due dates.
• A bill is an immediate payment request for goods or services already received.
• Invoices are commonly used in B2B transactions, while bills are more frequent in B2C settings.
• Optimizing invoicing and billing processes can improve cash flow, reduce errors, and speed up payments.

In business transactions, the terms invoice and bill are often used interchangeably, but they serve distinct purposes. Understanding the difference is crucial for managing accounts receivable, maintaining accurate financial records, and ensuring smooth cash flow.

An invoice is typically used in business-to-business (B2B) transactions, providing detailed payment terms and requesting payment at a later date. A bill, on the other hand, is a straightforward request for immediate payment, commonly seen in retail and service industries.

For businesses, knowing when to issue an invoice versus a bill can impact cash flow, customer relationships, and financial efficiency. In this guide, we break down the key differences, best practices, and how automating the process can streamline your financial operations.

Let’s dive in.

What is an Invoice?

An invoice is a financial document sent by a seller to a buyer, requesting payment for goods or services. It serves as an official record of the transaction, often including:

• Invoice number
• Date of issue
• Seller and buyer details
• Description of goods/services
• Payment terms (due date, early payment discounts, late fees)

Common Use Cases for Invoices:

• Business-to-business (B2B) transactions
• Service-based businesses (consultants, agencies, contractors)
• Recurring billing agreements

What is a Bill?

A bill is a request for immediate payment, typically given at the time of purchase or service completion. Unlike invoices, bills usually do not have extended payment terms.

Common Use Cases for Bills:

• Retail transactions
• Utility bills
• Restaurant receipts

Invoice vs. Bill: Main Differences

Best Practices for Invoicing and Billing

• Use Clear, Professional Invoices – Include all necessary details to avoid confusion.
• Set Clear Payment Terms – Specify due dates, accepted payment methods, and penalties for late payments.
• Automate Where Possible – Manual invoicing leads to delays and errors. Payment automation ensures faster processing.
• Track & Follow Up on Payments – Late payments hurt cash flow. Use automated reminders to keep AR on track.
• Optimize Payment Options – Make it easy for customers to pay with digital payment methods.

Invoicing and Billing with ERPs

Managing invoices and bills efficiently requires the right tools. Many businesses rely on ERP and eCommerce platforms to streamline their financial operations. Here’s how NetSuite, WooCommerce, and Sage handle invoicing and billing.

NetSuite

NetSuite is a cloud-based ERP that helps businesses manage financials, billing, and invoicing. Its invoicing features allow businesses to:

• Automate recurring invoices and billing cycles.
• Set custom payment terms (Net 30, Net 60, etc.).
• Track outstanding invoices and overdue payments.
• Integrate with payment solutions to accelerate cash flow.

By integrating NetSuite with an automated payments platform like Paystand, businesses can eliminate manual invoicing tasks, reduce processing fees, and improve AR efficiency.

WooCommerce

WooCommerce is a popular eCommerce platform for WordPress that supports invoicing and billing for online stores. Key invoicing features include:

• Generating invoices automatically when a customer places an order.
• Managing order-based payments and refunds.
• Sending digital invoices with itemized details.
• Offering multiple payment methods, including credit cards, ACH, and digital wallets.

WooCommerce merchants looking to optimize their invoicing process can leverage a plug-in with automated B2B payment solutions to reduce transaction fees and speed up settlements.

Sage

Sage provides accounting and financial management software with built-in invoicing capabilities. Businesses using Sage can:

• Generate and send professional invoices.
• Automate invoice reminders and track payments.
• Manage multi-currency transactions.
• Sync invoicing data with accounting and reporting tools.

Integrating Sage with a modern payment platform like Paystand can help businesses eliminate payment friction, automate collections, and improve financial visibility.

Acumatica

Acumatica is a cloud-based ERP designed for mid-sized and enterprise businesses. It offers:

• Automated invoicing workflows to reduce manual entry.
• Customizable billing cycles for different business models.
• Multi-entity and multi-currency support for global businesses.
• Integration with payment automation tools to accelerate cash collection.

Acumatica users can benefit from integrating with Paystand, allowing them to automate their invoice-to-cash cycle, eliminate payment processing fees, and improve overall financial efficiency.

Microsoft Dynamics

Microsoft Dynamics is a leading ERP and CRM platform that helps businesses manage their accounts receivable, invoicing, and billing processes. Key invoicing features include:

• Flexible invoicing templates for different industries.
• Automated payment reminders to reduce overdue payments.
• Seamless integration with accounting modules for real-time financial tracking.
• Cloud-based access to manage invoices and payments remotely.

By integrating Paystand with Microsoft Dynamics, businesses can streamline payments, reduce transaction costs, and ensure faster revenue collection through automation and smart invoicing solutions.

How Paystand Can Help

Managing invoices and payments manually is time-consuming and costly. Paystand automates invoicing and collections to improve cash flow, reduce transaction costs, and eliminate inefficiencies.

• Instant, Zero-Fee B2B Payments – Move money faster without transaction fees.
• Automated Invoice-to-Cash Process – Get paid faster with AR automation.
• Real-Time Payment Tracking – Improve visibility into your cash flow.

Ready to optimize your invoicing and billing? Learn how Paystand can help.