Is an invoice a contract?
Discover the differences between an invoice and contract and when to use each in your business.
Invoices and contracts are integral elements of any business so it’s essential to understand the difference between the two. An invoice doesn’t qualify as a contract, nor does a contract serve as an invoice. So which one is your business supposed to use and when? Read on to learn the answer.
What’s an invoice?
Invoices are professional documents that allow you to request payment from clients in exchange for your services. Depending on the type of business and agreed-upon terms, an invoice can be sent before or after work is completed.
Invoices typically consist of an itemized list describing your services and rates, as well as payment due dates and other pertinent information such as contact details and payment options.
What’s a contract?
A contract is simply a legally-binding agreement that establishes working expectations between the service provider and the client. Contract details can vary greatly, but they often serve as an outline for when goods or services (also known as deliverables) can be expected r and how and when payments should be made.
Contracts are meant to protect both the provider and the client. If you’re the provider, a contract not only ensures you receive prompt payment for your work it also ensures that client requests don’t veer outside the original scope. If you’re the client, a contract ensures you receive the work within the expected timeline and of the quality expected.
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