Difference Between an Invoice & a Statement
An invoice is a document a supplier sends to a buyer along with a shipment of goods. It lays out the items included in the delivery and the amount owed for them. A statement is an up-to-date report on what a customer still owes a vendor on account.
The primary purpose of an invoice is to ask a buyer for payment. The invoice also informs the buyer of the cost of each item included in a purchase order. It is the vendor's communication on why the buyer owes a particular amount. The primary purpose of a statement is to compel a buyer to make a payment on account. While a statement includes the most recent charges, it also notifies the buyer of amounts still owed on previous purchases.
A typical invoice includes a number of elements related to the particular order. The top of the invoice includes a header with a title of the invoice, contact information for the vendor and a customer name and number. It also has an invoice number for tracking purposes. The purchase date, product name, product number, quantity orders and per unit cost are itemized for each good ordered. A subtotal for all items purchased, a sales tax amount and a final total are usually displayed at the bottom of the invoice. It has information on payment terms and a payment address as well.
A statement isn't usually as intricate or detailed as an invoice. It shows the date of each transaction recorded during the statement period. Some companies only include unpaid amounts on statements, while others show all transactions in a given period. The invoice number and invoice total from each invoice are itemized on the statement. This information allows the customer to match paid and unpaid invoices on the statement to invoices and receipts. The statement also includes payment terms and remittance information.
An invoice normally includes the date an order was processed or shipped, as well as a date due for the payment. A statement has a "statement date," which is the day the statement is finalized and sent to the buyer. It is best for buyers to routinely pay balances due when an invoice arrives rather than waiting for statements, advises accountant Harold Averkamp. Statements are sometimes issued before payments are processed. Thus, by consistently paying invoices, you avoid confusion as to whether a balance has been paid when a statement arrives.