Difference Between a Statement and an Invoice

Last Updated November 30, 2023

As a business owner, it’s vital for you to understand the nuances between various documents in order to keep operations running smoothly. Two documents that often get mixed up are statements and invoices.

While you may see the terms “invoice” and “statement” and think they are repetitive, they actually serve different purposes and are used in separate situations.

Let’s dive into the differences between a statement vs. an invoice so you know when to use each one.

What Is a Statement?

A statement serves as a summary of financial transactions over a specific period of time. It typically reflects the transactions between a company and its customers or between a bank and an account holder.

Purpose of a Statement

The primary purpose of a statement is to provide an overview of account activity, allowing individuals or businesses to track transactions, monitor balances, and reconcile accounts.

A statement is often used to communicate financial activity to clients or customers. For example, a credit card statement outlines all the transactions made with the card during a billing cycle, detailing purchases, payments, and any fees incurred. A bank statement provides an account holder with a monthly snapshot of their account, showing deposits, withdrawals, and the closing balance.

These detailed records help individuals and companies keep a close eye on their financial transactions, ensuring accuracy and accountability.

What’s Included in a Statement?

A typical statement will contain the following:

• A list of transactions
• Dates of the transactions
• Brief descriptions of every transaction (such as purchases, payments, or deposits)
• The corresponding amounts
• Opening and closing balances during the statement period

For instance, your bank statement may summarize deposits, withdrawals, fees, and the account’s ending balance for the month. Statements provide a history of financial activity, offering a snapshot of financial affairs over a particular time frame.

What Is an Invoice?

A standard invoice is a formal document issued by a seller to a buyer outlining the details of a specific transaction and acts as a request for payment. It represents a bill for goods and services provided and details the amount due. While a statement provides an overview of numerous transactions or purchases over a period of time, an invoice is usually a detailed description of a single transaction.

Purpose of an Invoice

The primary purpose of an invoice is to request payment for goods or services provided. A seller uses an invoice to provide a clear record of what was delivered and the amount owed, while a buyer relies on an invoice as a proof of the transaction and a basis for processing payments. Properly tracking invoices that have been received and invoices that have been sent are typically major roles of every accountant’s job.

What’s Included in an Invoice?

An invoice includes information about the seller (or service provider), the buyer (or client), a unique invoice number, itemized details of the products or services provided, quantities, unit prices, the total amount due, and payment terms, which specify when the payment should be made.

When writing an invoice, you may outline a specific amount of hours billed, your rate, and the total amount owed. Business owners should ensure their invoices are clear, addressing every aspect of the transaction while using the “additional details” section to answer any questions that buyers might have regarding the deal.

Remember that there are different types of invoices, and they can vary in complexity. For example, a pro forma invoice is an initial bill of sale sent to buyers, outlining the goods or services requested along with offering an estimated cost for the products. Pro forma invoices differ from other kinds of invoices in that they are not legally binding. Estimates don’t always turn out precise.

When to Use a Statement vs. When to Use an Invoice

Now that we’ve established the basic purposes of statements and invoices, let’s break down when and why you would use each of these documents.

Statements are most often used in situations where there is recurring billing, such as your monthly credit card statement or the monthly statement you’re sent for whichever streaming service you use. In the business world, a designer working on contract for a client might issue a statement to the client describing the hours worked.

If you’re selling products or services, especially to another business,, you’ll likely write an invoice. They are extremely common in the B2B (business to business) world and also serve as an important record-keeping document once payment is processed.

Differences Between a Statement vs. Invoice

To summarize, the following table provides a clear picture of the differences between a billing statement and a sales invoice.

	Statement	Invoice
Function:	Provides a summary of financial transactions	Summarizes a transaction and requests payment for specific goods or services
Purpose:	Helps individuals or businesses monitor and reconcile account activity	Requests payment for products or services rendered and acts as an important record-keeping document once payment is processed
Details Included:	Lists transaction details, balances, and account activity	Contains specific product or service information, quantities, payment terms, and amounts due
Timing:	Generated periodically, sometimes on a recurring basis, summarizing past transactions	Usually issued at the time of the sale, though this is not always the case depending on the type of invoice being used

Statement vs. Invoice FAQs

Is a billing statement the same as an invoice?

No, a billing statement is not the same as an invoice. A billing statement summarizes account activity, while an invoice is a request for payment.

When would I need to utilize both a statement and an invoice?

You would use both a statement and an invoice when your business relationship involves recurring transactions. A statement helps track these transactions overall, while an invoice requests payment for specific goods or services for each individual transaction.

Is a statement proof of payment?

A statement is not proof of payment. Rather, it’s a record of transactions. Proof of payment usually involves a receipt or confirmation of payment.

Is an invoice the same as a bill?

Yes and no. Most invoices are also considered bills, but every bill is not an invoice. An invoice has a specific definition and requests payment for goods or services provided while a bill is a term that’s a bit more vague, including documents such as phone bills and auto bills.

Is an invoice the same as a receipt?

No, an invoice is not the same as a receipt. An invoice is a request for payment while a receipt acknowledges that payment has been made.