What’s the difference between a bill (or invoice) and a statement?
April 25, 2008
Let’s face it – the English language can sometimes be imprecise. 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?
While we can’t make the English language any better, we can at least shed some light on the distinction between bills (or invoices) and statements as they relate to TurboLaw Time and Billing.
In TurboLaw Time and Billing, a bill (also called an invoice) is just what you’d think it is – an itemized list of work done for the client, and how much they owe you for it. For example, a bill might have the following items on it:
- Spent 3 hours in court: $450.00
- Travel expenses to meet with client: $75.00
- On-site meeting: $250.00
- TOTAL DUE: $775.00
This is like a bill or invoice that you might get when you purchase something. We tend to call it a “bill” because you “bill” for your services, while you get an “invoice” for goods – but in practice the two terms are generally interchangeable.
A bill doesn’t say anything about money that might have already been paid – it simply lists the work or expenses you’ve done and how much they total up to.
On the other hand, a statement in TurboLaw Time and Billing is a “statement” of the status of the client’s account at a particular point in time. Each line item on a statement represents either a bill or a payment. As such, it doesn’t offer as much detail as a bill – but it does show payments made towards the account. Statements are often sent out on a regular basis (e.g., monthly – like your credit card statement) to show your clients where they stand (and if they still owe you any money). For example, a statement might have the following items on it:
- Balance forward: $85.67
- Bill #123: $290.00
- Payment #82: $50.00
- TOTAL BALANCE: $325.67
This shows that the client had a balance due of $85.67 from before the period of this statement (if you send out statements monthly, your statement period is usually “the last 30 days”) and that in that time, a bill for $290 was produced, but the client sent in a payment of $50, resulting in a final balance due of $325.67.
To see a sample bill and statement, click on the images below.
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- A Sample Statement
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- A Sample Bill
Hopefully this helps clear up any confusion about what the difference is between bills, invoices, and statements. As always, if you have questions about any TurboLaw product, you can call us at (800) 518-8726 or email support@turbolaw.com.
Related articles:
- TurboLaw Time and Billing 1.10 Released
- TurboLaw Time and Billing Version 1.08 Released
- TurboLaw Time and Billing 1.11 Released
Comments
3 Responses to “What’s the difference between a bill (or invoice) and a statement?”
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What do you think about this? I pay my bills monthly. What if a company stops sending you a bill and you are late paying. This has happened to me several times and it has affected my credit.
Although we can’t give advice for that sort of thing, I suppose it would depend on the particulars of your payment agreement with the company that was sending you the bills. Depending on the agreement, it might still be your responsibility to pay a recurring bill on-time, even if the monthly bill never reaches you. If it’s happened to you many times and affected your credit, you may wish to consult with an attorney.
Isn’t a bill more B-to-C, and an invoice more B-to-B?