Scenario 3: Invoices only
Gloria is a freelance content writer working fully remotely. She writes content batches for SaaS and tech brands.
Her main services include:
→ With some clients, she offers payment retainers split into two to three payments. With others, she charges per asset twice a month. And with some, she charges by the quarter.
→ Since Gloria’s content prices vary by request and batch, she uses invoices to bill her clients for her writing services. To keep the process smooth, she creates invoices using a template. She customizes each template with the number of assets, asset type, word count, and final cost.
She also uses invoicing software to send invoices to her clients’ inboxes and track receivables.
Invoicing or billing — which one’s right for my business?
Still stuck on what method to use?
Use the following quiz to discover what’s best for your specific business.
Question 1: What kind of products or services do you offer?
- A) Digital products
- B) Physical products
- C) Manufacturing goods, such as materials
- D) Services
Question 2: What types of customers do you serve?
- A) Online customers
- B) Online shoppers
- C) Wholesale vendors
- D) Other businesses
Question 3: How often do you sell to your customers?
- A) It’s random
- B) Weekly
- C) Monthly
- D) Quarterly
Question 4: How long does it take for customers to receive your product or service?
- A) Available for immediate download
- B) Three to five business days with standard shipping
- C) In bulk, once monthly
- D) It depends on the project
Question 5: Do you serve B2B brands, B2C brands, wholesalers, or consumers?
- A) B2C brands
- B) Consumers
- C) Wholesalers
- D) B2B brands
Question 6: What kind of payment options do you offer?
- A) Flat rate per digital product due immediately
- B) Costs vary per item — can pay immediately or choose a pay-later option
- C) Bi-weekly, monthly, or quarterly charge
- D) Payment due upon receipt before projects start
Question 7: What’s your customer turnover rate like?
- A) Mostly only new customers buy — with some repeats
- B) Customers come and go, but some have shopping profiles and shop with us often
- C) Our wholesale vendors have partnered with us for years
- D) Smaller projects may last six months, while routine partnerships last indefinitely
Question 8: How do your customers pay you?
- A) By credit card, debit card, or PayPal
- B) We accept most payment forms, including Apply Pay and Sezzle
- C) Credit card or bank transfer
- D) Bank transfer
Question 9: Can your billing cycles and payments be automated?
- A) It depends on the digital product
- B) If they sign up for a monthly subscription box, yes
- C) Yes
- D) No
Question 10: How large are your customer orders?
- A) Small
- B) Small to medium unless it’s a holiday — then they’re large
- C) Medium to large
- D) Varies per project
Finished? Use the following key to determine which process to use!
If you chose A six or more times:
Then, you likely sell smaller orders, have instant downloads, and/or have one-time customers.
→ In this case, the best method for your business is invoicing.
Rationale: When your customers change often, or you sell smaller orders, it doesn’t make sense to set up a routine billing system. Invoices give you the flexibility to bill customers as they buy.
If you chose B six or more times:
Then, you likely run an ecommerce business or cater to shoppers who buy physical products a la carte. You might also have shoppers that sign up for monthly subscription boxes.
→ In this case, the best method for your business is invoicing (for short-term customers) and billing (for subscription-box customers).
Rationale: When you have flighty and loyal shoppers, having an invoicing system helps you serve your random shoppers, while a billing system helps you serve your routine shoppers.
If you chose C six or more times:
Then, you likely sell to wholesale vendors who buy in bulk on a regular basis.
→ In this case, the best method for your business is billing.
Rationale: When you have large orders from long-term customers on a regular basis, you need a way to keep track of rendered products and services and account statuses. Billing is the solution.
If you chose D six or more times:
Then, you likely serve a variety of B2B clients with various needs — some might be regulars, while others may only need you for short-term projects.
→ In this case, the best method for your business is invoicing.
Rationale: When your orders vary by time period and customer, billing may get too complicated. In this case, stick to invoicing to maintain flexibility.
Wrap up
Invoicing or billing — which option is best for your business?
While invoicing works great for one-time or as-needed transactions, billing works better for routine transactions. You can also use billing and invoicing methods if you serve both long-term and short-term clients.
Here’s how to get the most out of both:
- Best practices for invoicing
- Best practices for billing
- Keep detailed records of goods and services rendered
- Set up automated systems
- Build it into your financial operations
- Create a set billing cycle
If you haven’t already, take the quiz above to determine the best option for your business. And if you’re still on the fence, consider testing both options with Billdu.
Billdu offers an invoice maker app, and other tools to help you streamline your invoicing and billing processes. Turn features on and off as you grow and learn what works best for you.
We hope this in-depth guide has helped you clear the air on invoicing versus billing.