What is the difference between an invoice and a bill of sale?

Although similar, an invoice and bill of sale are not the same. An invoice is a non-legally binding request sent by a seller to a buyer that identifies which goods or services are being purchased and the due date for payment. A bill of sale is a legally binding document where a seller confirms delivery of the goods and transfer of legal title to the property to the buyer for immediate payment at an agreed upon price. As such, a bill of sale may contain information in addition to that contained in an invoice, such as warranties and other promises of the parties.

Both documents are commonly used for commercial purposes, but bills of sale are also often used for private transactions of valuable items, such as vehicles, equipment, animals, art, and jewelry. Invoices are typically not signed by the parties; however, a seller typically signs a bill of sale, and the buyer may or may not sign as well, depending on whether the buyer is also making any promises in the document. An invoice maybe be provided before, during, or after the delivery of the goods or services provided, while a bill of sale is normally provided upon delivery. 

Invoices are often used in transactions where the seller issues a credit or debt on the buyer’s account. On the other hand, a bill of sale is typically a request for immediate payment and is therefore often used in cash transactions without any credit or debt involved. Bills of sale sometimes request payment at a future due date, but this is less common. 

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