Invoicing vs. Billing: What’s the Difference?


11 min


June 5, 2024

Managing your finances efficiently as a business owner requires systems and processes, like setting strategic goals and using the right business tools.

That’s where invoicing and billing come in. 

By knowing the differences and following best practices, you can set up workflows that help you stay on top of your payables, receivables, and profit margins.

Let’s take a closer look at invoicing versus billing — and some best practices to keep in mind.

What is Invoicing?

Invoicing is a payment request method businesses use to bill clients for rendered services or products. 

Businesses use a physical or digital document called an invoice to send a request for payment. Invoices list business contact details, payment instructions, acceptable payment methods, the amount the client owes, and any relevant notes. 

white invoice, simple invoice

It’s a routine business operation for many businesses, including:

  • Ecommerce businesses 
  • Mid-size businesses
  • Service providers
  • Small businesses
  • Freelancers
  • Enterprises 

Say Goodbye to Manual Invoicing, Automate with Billdu!

Manual invoicing is time-consuming and prone to errors. Switch to Billdu for seamless, automated invoicing and streamline your business operations today!

Free 30-day trialNo credit card requiredCancel anytime
Billdu - alternative to accounting software for Aussie small businesses

What is Billing?

Billing is also a request for payment but works a bit differently. It’s generally used for longer-term services, manufactured goods and materials, and subscription business models

Billing processes vary by business type and customer need. 

For instance, a construction project management company might use billing systems to charge clients for a list of wholesale supplies and materials every quarter, including the option of how to void a check if necessary. A SaaS company might use billing processes to charge clients for their monthly app subscription costs.

What are the Key Differences between Billing and Invoicing?

Imagine a credit card statement lying on your desk to the left — and an invoice for graphic design services to the right. 





The process of creating a detailed statement of products or services provided, including costs.

The act of requesting payment for goods or services rendered.





To provide a detailed record of a sale and request payment.

To request payment for goods or services.

Details Included

Itemized list of products/services, quantities, prices, total amount, terms of payment.

Summary of the amount owed, usually with less detail.


Usually sent to customers or clients.

Can be given to customers, clients, or consumers.


Often sent after goods/services are delivered.

Can be issued at the point of sale or after services are rendered.

Usage Context

Common in business-to-business (B2B) transactions.

Common in both business-to-consumer (B2C) and business-to-business (B2B) transactions.

What differences would you spot?

The main difference would likely be the payment billing cycle.

Invoices are for one-time transactions, like logo design or branded merch. Bills are for longer-term business transactions — like credit card bills, which charge for purchases made over the last 28–31 days. 

Other billing examples include:

  • Charges for hotel accommodations and room service
  • Charges for monthly website maintenance services 
  • Charges for wholesale goods and materials

Other invoicing examples include:

  • Payment request for virtual assistant services 
  • Payment request for freelance writing content 
  • Payment request for custom-framed artwork 

While they’re both business transactions that help bring in cash flow, there are some nuances around payment terms, relationship duration, and billing process. 

For example, you might auto-debit a customer’s account for their bill each month on the 10th. Or send an invoice by email to a client that’s due upon receipt. 

Best practices for invoicing

Follow these tips to systematize your invoicing practices:

Use an invoice template

Use an invoice generator or make your own invoice template — and customize it for each client when needed. Invoice templates can help you establish aligned branding and a framework for your invoicing process. 

Billdu invoice templates, customize invoice templates

Set invoice terms

On each invoice, describe acceptable payment methods, the payment due date, and the amount. You might also note other payment details, such as late payment fees. 

Include contact details

Add your business contact information, such as your business name, address, and phone number. You’ll also need a customer contact information section that you can customize on each invoice.

For more details, check out the article: Essential Invoice Elements.

Simplified creation of invoices with Billdu!

Simplified creation of invoices with Billdu! Download our invoicing app for Android and Apple today and streamline your invoicing process effortlessly!

Free 30-day trialNo credit card requiredCancel anytime
Pro invoice maker for small businesses

Best practices for billing

Promote business efficiency with the following billing best practices. 

Keep detailed records of goods and services rendered

Use a tracker or spreadsheet to account for all goods and services rendered per customer. Make sure it includes fields for cost, date, and item/service. If you sell products, include a field for the number of items, too. 

Set up automated systems

Create automations that bill your routine clients bi-weekly, monthly, or quarterly. You can also set up auto-debits for customers who agree to them or for subscription-based offers. 

Build it into your financial operations

Include billing as an integral component of your financial operations. Keep track of it like the way you track your profits and losses, debts, and investments. Set up helpful workflows and pull relevant billing reports when needed.

receipt scanner, receipt, Billdu app

Create a set billing cycle

For predictability, to solidify partnerships, and to stay on track, decide on a set billing cycle for your billing customers. For instance, you might charge for goods every month or for services by quarter.

Examples of invoicing and billing

Let’s put invoicing and billing into context by describing some relevant business scenarios.

Scenario 1: Bills and invoices

Marsha has a flower shop business in downtown Charlotte, North Carolina. She sells florals to other flower shops, hotels, restaurants, and event coordinators. 

Her main offers include:

  • Specialty orders for weddings and small events
  • Weekly deliveries to hotels and restaurants
  • Selling wholesale flowers 

→ For wholesale flower pickup and weekly deliveries, she uses billing systems. These help Marsha keep a record of how many flowers customers have purchased, when, how many, and for how much. 

→ For specialty orders, she uses invoicing software. These help her create one-time payment requests for event flowers with her business logo and contact details. 

Scenario 2: Bills only

Bennett and Rachel own a furniture restoration shop in Boulder, Colorado. They restore furniture for resell furniture stores, boutique furniture stores, and wholesale furniture stores. 

Their main services include:

  • Waxing, shining, and polishing
  • Complete showroom remodels
  • Complete furniture restoration

They often receive at least 10 to 15 pieces of furniture per order — and sometimes up to 100 pieces. They’ve been restoring furniture for their clients for decades.

 → For small orders, Bennett and Rachel bill monthly. They also auto-debit their clients’ accounts for the amount listed on each monthly bill. Bills list the furniture items, quantities, costs, and specific renovation services. 

→ For large orders, Bennet and Rachel bill quarterly. They ask clients to remit payment via credit card, Wise, or Zelle. Bills list bulk furniture items that were restored, specific renovation services, and costs.

Bill anywhere, anytime with Billdu!

Try Billdu today to start creating professional looking invoices and tracking your expenses and automatically generate key data inputs for your financial forecasts.

Free 30-day trialNo credit card requiredCancel anytime
Pro invoice maker for small businesses

Scenario 3: Invoices only

Gloria is a freelance content writer working fully remotely. She writes content batches for SaaS and tech brands. 

Her main services include:

 → With some clients, she offers payment retainers split into two to three payments. With others, she charges per asset twice a month. And with some, she charges by the quarter. 

 → Since Gloria’s content prices vary by request and batch, she uses invoices to bill her clients for her writing services. To keep the process smooth, she creates invoices using a template. She customizes each template with the number of assets, asset type, word count, and final cost.

She also uses invoicing software to send invoices to her clients’ inboxes and track receivables. 

Invoicing or billing — which one’s right for my business?

Still stuck on what method to use?

Use the following quiz to discover what’s best for your specific business.

quiz, test, invoicing test

Question 1: What kind of products or services do you offer?

  • A) Digital products
  • B) Physical products 
  • C) Manufacturing goods, such as materials
  • D) Services 

Question 2: What types of customers do you serve?

  • A) Online customers 
  • B) Online shoppers 
  • C) Wholesale vendors
  • D) Other businesses 

Question 3: How often do you sell to your customers?

  • A) It’s random
  • B) Weekly
  • C) Monthly 
  • D) Quarterly 

Question 4: How long does it take for customers to receive your product or service?

  • A) Available for immediate download 
  • B) Three to five business days with standard shipping 
  • C) In bulk, once monthly 
  • D) It depends on the project 

Question 5: Do you serve B2B brands, B2C brands, wholesalers, or consumers?

  • A) B2C brands 
  • B) Consumers
  • C) Wholesalers 
  • D) B2B brands

Question 6: What kind of payment options do you offer?

  • A) Flat rate per digital product due immediately 
  • B) Costs vary per item — can pay immediately or choose a pay-later option
  • C) Bi-weekly, monthly, or quarterly charge
  • D) Payment due upon receipt before projects start

Question 7: What’s your customer turnover rate like?

  • A) Mostly only new customers buy — with some repeats
  • B) Customers come and go, but some have shopping profiles and shop with us often 
  • C) Our wholesale vendors have partnered with us for years 
  • D) Smaller projects may last six months, while routine partnerships last indefinitely 

Question 8: How do your customers pay you?

  • A) By credit card, debit card, or PayPal
  • B) We accept most payment forms, including Apply Pay and Sezzle
  • C) Credit card or bank transfer 
  • D) Bank transfer 

Question 9: Can your billing cycles and payments be automated?

  • A) It depends on the digital product 
  • B) If they sign up for a monthly subscription box, yes
  • C) Yes
  • D) No

Question 10: How large are your customer orders?

  • A) Small 
  • B) Small to medium unless it’s a holiday — then they’re large
  • C) Medium to large 
  • D) Varies per project

Finished? Use the following key to determine which process to use!

Billing quiz results

If you chose A six or more times:

Then, you likely sell smaller orders, have instant downloads, and/or have one-time customers. 

 → In this case, the best method for your business is invoicing. 

Rationale: When your customers change often, or you sell smaller orders, it doesn’t make sense to set up a routine billing system. Invoices give you the flexibility to bill customers as they buy.

If you chose B six or more times:

Then, you likely run an ecommerce business or cater to shoppers who buy physical products a la carte. You might also have shoppers that sign up for monthly subscription boxes. 

 → In this case, the best method for your business is invoicing (for short-term customers) and billing (for subscription-box customers).

Rationale: When you have flighty and loyal shoppers, having an invoicing system helps you serve your random shoppers, while a billing system helps you serve your routine shoppers.

If you chose C six or more times:

Then, you likely sell to wholesale vendors who buy in bulk on a regular basis. 

 → In this case, the best method for your business is billing.

Rationale: When you have large orders from long-term customers on a regular basis, you need a way to keep track of rendered products and services and account statuses. Billing is the solution.  

If you chose D six or more times:

Then, you likely serve a variety of B2B clients with various needs — some might be regulars, while others may only need you for short-term projects. 

 → In this case, the best method for your business is invoicing. 

Rationale: When your orders vary by time period and customer, billing may get too complicated. In this case, stick to invoicing to maintain flexibility. 

Wrap up

Invoicing or billing — which option is best for your business? 

While invoicing works great for one-time or as-needed transactions, billing works better for routine transactions. You can also use billing and invoicing methods if you serve both long-term and short-term clients. 

Here’s how to get the most out of both:

  • Best practices for invoicing
  • Best practices for billing
    • Keep detailed records of goods and services rendered
    • Set up automated systems
    • Build it into your financial operations
    • Create a set billing cycle

If you haven’t already, take the quiz above to determine the best option for your business. And if you’re still on the fence, consider testing both options with Billdu

Billdu offers an invoice maker app, and other tools to help you streamline your invoicing and billing processes. Turn features on and off as you grow and learn what works best for you. 

We hope this in-depth guide has helped you clear the air on invoicing versus billing. 

Explore all Billdu features today!

Discover Billdu’s powerful invoicing features that can streamline your billing process. Try all the invoicing features today and see the difference it makes for your business!

Free 30-day trialNo credit card requiredCancel anytime
Pro invoice maker for small businesses

Looking for Downloadable Invoice Templates?

We have them ready for you, select your format and get your invoice template now

SEO Specialist at Billdu

David Fačko works as an SEO and Content specialist at Billdu, best-rated invoicing software solutions for freelancers and small businesses.