Invoice and statement is a very common term for an individual who is regularly involved in business transactions. While one might mistake one for the other, a careful study of both of them would make one realise how different these both are.
Invoice vs Statement
The main difference between invoice and statement is that an Invoice has a direct impact on the accounts of an organization, whereas a statement is just informational and is derived from the account itself and thus it does not have any impact the accounts of an organization. In simple words, an invoice calls for action while a statement is just a reminder.
An invoice is a commercial document issued to the buyer by the seller which describes the products, quantities, and prices involved in the transaction carried out between the buyer and seller.
A statement is a document issued by the business entity to its customer which highlights all the transactions made between them in a particular time period.
Comparison Table Between Invoice and Statement
| Parameters of Comparison | Invoice | Statement |
| Definition | An invoice is a commercial document issued to the buyer by the seller which describes the products, quantities, and prices involved in the transaction carried out between the buyer and seller. | A statement is a document issued by the business entity to its customer which highlights all the transactions made between them in a particular time period. |
| Accounting effect | Invoice has an immediate impact on the accounts of an organization. | A statement is just informational and derived from the accounts thus, it does not have any effect on the accounts of an organization. |
| Role | An Invoice forces Action | A statement is just a reminder. |
| Intent | An Invoice is issued with the intent of collecting payment from another party for the mentioned transaction. | A statement is issued with the intent of mentioning all transactions for record and sometimes to act as a notification of non-payment. |
| Detail | An Invoice has more details as compared to a statement. | A statement has fewer details as compared to an invoice. |
| Scope | An invoice has a narrow scope and can also be called a statement. | A statement has a wider scope. |
| Time Period | An invoice is issued after every transaction between two parties. | A statement is issued after a specific pre-decided time period. |
What is an Invoice?
An invoice is a commercial document issued to the buyer by the seller which describes the products, quantities, and prices involved in the transaction carried out between the buyer and seller.
An invoice forces action and is issued with the intent of collecting payment from another party for the mentioned transaction. It has an immediate impact on the accounts of an organization.
When compared to a statement an invoice has more amount of details in the form of the product, quantity and price. Also, an invoice has a narrower scope and can also be referred as a statement but this nomenclature doesn’t work the other way round.
An invoice is issued after every transaction between two parties. In simple words, it’s a bill. Along with specifying the details of the transaction made it also talks about the payment terms made by the two parties.
What is a Statement?
A statement is a document issued by the business entity to its customer which highlights all the transactions made between them in a particular time period.
A statement is just informational and derived from the accounts thus, it does not have any effect on the accounts of an organization. In other words, it does not force any action and is just a reminder. It is issued with the intent of mentioning all transactions for record and sometimes to act as a notification of non-payment.
When compared to an Invoice a statement has fewer details and has a wider scope. A statement cannot be referred to as an invoice while an invoice can be referred to as a statement.
Main Differences Between Invoice and Statement
- An invoice is a commercial document issued to the buyer by the seller which describes the products, quantities, and prices involved in the transaction carried out between the buyer and seller while a statement is a document issued by the business entity to its customer which highlights all the transactions made between them in a particular time period.
- Invoice has an immediate impact on the accounts of an organization as it forces the business to recognize a transaction and subsequently make changes in the accounts while a statement is just informational and derived from the accounts thus, it does not have any effect on the accounts of an organization.
- An invoice forces action while a statement is just a reminder.
- An Invoice is issued with the intent of collecting payment from another party for the mentioned transaction while a statement is issued with the intent of mentioning all transactions for record and sometimes to act as a notification of non-payment.
- An Invoice has more details as it includes all details regarding one transaction which include products their quantity and their price. A statement has fewer details as compared to an invoice as a statement just includes mentions about all invoices.
- An invoice has a narrower scope as compared to a statement. An invoice can be called as a statement but a statement cannot be called as an invoice.
- An invoice is issued after every transaction between two parties while a statement is issued after a specific pre-decided time period.
Conclusion
An invoice is a commercial document issued to the buyer by the seller which describes the products, quantities, and prices involved in the transaction carried out between the buyer and seller while a statement is a document issued by the business entity to its customer which highlights all the transactions made between them in a particular time period.
In terms of impact on accounts of an organization, an invoice has direct impact on the accounts while the statement does not have any impact as it is derived from the accounts itself.An Invoice is issued with the intent of collecting payment from another party for the mentioned transaction while a statement is issued with the intent of mentioning all transactions for record and sometimes to act as a notification of non-payment.
Both these terms are very familiar to people involved in business transactions and you would never expect them to mistake one for the other. A very interesting fact is that while an invoice can be referred to as a statement this equation does not work the other way round. This signifies the fact that a statement has a wider scope than an invoice.
References
- https://link.springer.com/chapter/10.1007/978-3-319-95735-7_24