Quotation vs Invoice: What's the Difference?

The Short Answer

A quotation (also called a quote or estimate) is sent before work begins — it tells a potential client how much something will cost. An invoice is sent after the work is done — it requests payment for work completed.

If you're a plumber, you send a quotation before touching a pipe. Once the job is done, you send an invoice for the agreed amount. Simple.

But there's more to it than that — especially if you're running a business and need to stay legally and financially organised.

What Is a Quotation?

A quotation is a formal price proposal. It outlines:

The products or services you're offering

The price for each item or the total project cost

The validity period (e.g., "this quote is valid for 30 days")

Any terms and conditions that apply

Quotations are not legally binding demands for payment — they're offers. The client can accept, reject, or negotiate.

Once a client accepts a quotation, you have a basis for an agreement. At that point, many businesses convert the quotation directly into an invoice.

When to use a quotation:

Before starting a job

When a client asks "how much will this cost?"

For project-based or custom work where the scope needs to be agreed upfront

When tendering for contracts

What Is an Invoice?

An invoice is a formal request for payment. It confirms that goods have been delivered or services have been rendered, and specifies the amount owed, payment terms, and due date.

Unlike a quotation, an invoice creates a legal obligation — once issued, the client is legally required to pay within the agreed terms.

An invoice must contain:

Your business name and contact details

The client's name and billing address

A unique invoice number

The invoice date and due date

An itemised list of goods or services with prices

The total amount due, including any applicable tax

When to send an invoice:

When work is complete

At agreed milestones (e.g., 50% upfront, 50% on completion)

On a recurring schedule (e.g., monthly retainer)

Immediately after delivering goods

Key Differences at a Glance

Quotation:

Sent before work starts

Not a request for payment

Can be accepted, rejected, or negotiated

Has an expiry date

Does not create a payment obligation

Invoice:

Sent after work is delivered

Is a formal payment request

Legally binding once issued

Has a due date

Creates a payment obligation

Can a Quotation Become an Invoice?

Yes — and this is one of the most time-saving features in modern invoicing tools. Once a client accepts your quotation, you can convert it directly into an invoice with a single tap. All the line items, prices, client details, and terms carry over automatically. No re-entering data.

This workflow — quotation → accepted → invoice — is how most project-based businesses operate.

Quotation Expert handles this entire workflow. Create the quote, send it to the client, mark it as accepted when they confirm, and convert it to an invoice in one tap. The whole process takes under two minutes.

What About Proforma Invoices?

A proforma invoice sits between a quotation and a final invoice. It looks like an invoice but is issued before goods or services are delivered — often to confirm a sale, request a deposit, or facilitate import/export customs clearance.

Unlike a quotation, a proforma invoice typically shows full invoice formatting. Unlike a final invoice, it doesn't create an immediate legal payment obligation.

Other Related Documents

Purchase Order — sent by the buyer (your client) to you, authorising a purchase. It's the buyer's equivalent of a quotation.

Receipt — issued after payment is received, confirming that money has changed hands.

Delivery Note — accompanies a physical shipment, listing the items delivered. Often signed by the recipient as proof of delivery.

All of these documents are interconnected. Good business management software tracks them all in one place — so you always know the status of every job, order, and payment.

Summary

Use a quotation when someone asks how much something will cost. Use an invoice when it's time to get paid. Convert one to the other automatically to avoid double data entry.

Quotation Expert makes both documents free to create, with professional PDF export, automatic tax calculation, and cloud sync across Android and web.