Invoice vs statement: what each is for and when to send it

An invoice asks a customer to pay for one piece of work. A statement lists everything that customer still owes you, invoice by invoice, with what is left to pay on each one and how late it is. The invoice is the bill. The statement is the running total.

You usually need both. The invoice goes out when you bill the work. A statement goes out when a customer has more than one open invoice, pays on a monthly cycle, or asks what they owe. Below are the two side by side, a worked example with three open invoices, when to send which, and what a bookkeeper wants to see.

The difference at a glance

What an invoice is for

An invoice is the bill for one piece of work: a job, a stage of a job, or a period of work. It says what you did, what it costs, when payment is due and how to pay. It is also the record of the sale. When you or your bookkeeper look back at a job, the invoice is the document that shows what was billed for it.

A useful invoice has its own number, the date, the customer’s name, a plain description of the work, the amount, the due date and a way to pay. What an invoice has to show, and how long you keep it, vary by place. This page is general information, not legal or tax advice, so check with your bookkeeper or the rules where you operate.

What a statement is for

A statement answers one question: what does this customer owe me, in total, right now? It lists every invoice that is still open. Beside each one it shows what is still owed, not the original amount, so an invoice the customer has part paid shows only what is left. It credits the payments you have received, and it shows how late each invoice is, so the customer can tell what is overdue from what is not yet due.

A statement bills nothing new. Every amount on it was already on an invoice, and the statement adds them up, so the customer sees one total instead of a separate email for each invoice. You may also hear it called a statement of account. It is not a bank statement, which lists the money moving through an account.

A worked example: three open invoices, one statement

Say you sent one customer three invoices: INV-101 for $2,000, INV-102 for $1,500 and INV-103 for $500. The customer has paid $500 toward INV-102. The figures are made up, to show the arithmetic. This is the statement you would send.

Payment received: $500 by check, number 5001, credited to INV-102.

The three invoices add up to $4,000. The statement asks for $3,500, because $500 of that is already paid. If it listed each invoice at its full amount, it would ask the customer for money they have already sent, and you would spend your next call explaining why. That is why a statement shows balances, and why it names the payment it has credited.

When to send each

Send an invoice when you bill the work

Send it when the job is done, or at the point your quote or agreement says to bill, such as a deposit up front or a stage of the work. Send it promptly, to the person who pays the bills, with the due date on it.

Send a statement when there is more than one thing to add up

Send one at the end of the month to a customer you bill more than once a month. Send one when a customer has several open invoices and some are late, so a single document shows where things stand instead of a separate message for each. Send one when a customer asks what they owe, or before you phone about money, so you are both looking at the same numbers.

Some customers, especially businesses with an accounts-payable team, pay from a monthly statement and not invoice by invoice. If a customer tells you theirs does, send their statement on a regular schedule. A customer who owes you nothing does not need one.

If a statement goes unanswered, the next step is a reminder. The payment reminder email templates cover what to say at 7, 30, 60 and 90 days late.

Why a customer who pays on a statement still needs the invoice

A statement is a summary, and a summary needs something behind it. When a customer’s accounts-payable team pays from a statement, each line still has to match an invoice that someone approved: the job, the amount and often a reference of their own. If the customer never received INV-101, nobody there can approve its line, and the statement may sit unpaid.

So send each invoice when you bill the work, and the statement after. Keep the same invoice numbers and amounts on both, so every line on the statement can be matched to an invoice. If a customer’s total does not match yours, ask which invoice they are missing, and send it again.

What a bookkeeper wants to see

Whoever keeps the books, yours or your customer’s, is matching documents to money. On a statement, they look for:

• An invoice number and date on every line, so each line can be matched to an invoice.
• The balance on each invoice, and the payments already credited, with each payment’s date and its check number or other reference.
• How late each invoice is, so they can tell what is overdue from what is not yet due.
• A total that agrees with your own records. If your books say one figure and the statement says another, find out why before you send it.

On each invoice behind the statement, they want the number, the date, a description of the work and the amount, unchanged from the day you sent it.

How Bevr handles this for you

If you would rather not put these documents together yourself, Bevr can send both. You can draft, send and track invoices without leaving the conversation. Say "send Acme a statement" and Bevr emails them every open invoice with what is still owed on it, aged. The statement shows balances rather than face values, with the payments you have received, by date and check number, already credited. It is aged the same way your own report is, so the two never disagree. Read more in the features, or see what Bevr costs.