Quotation vs Invoice: What's the Difference?

Quotations and invoices look alike, which is why they get mixed up. The difference is timing and what each one commits you to.

The short answer

• A quotation (also called a quote or estimate) is an offer: "Here is what this job will cost if you want it." It comes before the work, and the customer can accept it or walk away.
• An invoice is a request for payment: "Here is what you owe me for the work or goods I delivered." It comes after the sale or the job, or with a deposit request along the way.

Side by side

• When: a quotation is sent before the work. An invoice is sent after, or when payment is due.
• Purpose: a quotation wins the job. An invoice collects the money.
• Commitment: a quotation is usually valid for a limited time and does not create a debt. An invoice records an amount the customer owes.
• Numbering: both get their own number, but keep quotations and invoices in separate sequences so neither has gaps you cannot explain.
• Accounting: an unaccepted quotation is not income. An invoice is a record of a sale.

When to send a quotation

Send one whenever the price is not obvious at the counter: a repair, a custom order, a project, an event, anything where the scope can change the cost. A good quotation shows:

1. What is included, line by line, and what is not.
2. The total, with tax and discounts shown separately.
3. How long the price is valid, such as 14 or 30 days.
4. What happens next: how to accept it, and whether you need a deposit.

Written scope protects both sides. Most "you said it would cost less" arguments start with a verbal price.

When to send an invoice

Send an invoice when the customer owes you: after the job is done, when you deliver the goods, or when a milestone or deposit falls due. Put the due date and payment details on it, and see our checklist of what an invoice should include.

From quotation to invoice without retyping

The most common mistake is retyping the accepted quotation as an invoice and changing a number by accident. Create the invoice from the quotation instead, so every line, price and tax figure carries over. In EzInvoice you can convert an accepted quotation into an invoice in one step, so nothing is retyped.

What about a receipt?

A receipt is the third document: proof that payment was received. See invoice vs receipt for how it differs from both.