Invoice vs Quotation: What Is the Difference?
A quotation offers to do work at a price. An invoice demands payment for work already agreed or delivered. Sending the wrong one either makes you look premature or leaves you with no record of what was agreed.
Side-by-side comparison
| Quotation | Proforma invoice | Invoice | |
|---|---|---|---|
| Purpose | Offer a price | Show expected charges before supply | Request payment |
| Sent when | Before agreement | After agreement, before delivery or payment | At or after delivery |
| Creates a debt | No | No | Yes |
| Enters your books as revenue | No | No | Yes |
| Typically numbered | Own sequence (QUO-) | Own sequence (PI-) | Strict invoice sequence |
| Expiry | Usually 14 to 30 days | Usually stated | Not applicable, has a due date |
What belongs on a quotation
Building the quotation with the same line items you will later invoice removes an entire class of dispute, because the two documents can be compared row by row.
- Clear scope: what is included and, just as important, what is not.
- Price breakdown with the same line structure your invoice will use.
- Validity period after which the price may change.
- Assumptions, for example site access or client-supplied materials.
- Acceptance method: signature, email approval or purchase order.
Estimates are not quotations
An estimate is an informed guess and can change as work progresses. A quotation is a firm price for a defined scope. Label the document honestly; calling a rough estimate a quotation and then billing more is the fastest way to lose a client.
If genuine uncertainty exists, quote a firm price for the defined part and an hourly rate for the variable part.
Converting a quotation into an invoice
When the client accepts, keep the accepted quotation, then create the invoice with the same line items, add the invoice number and dates, deduct any deposit, and reference the quotation number. In this generator you can export the quotation data as JSON and import it again as the basis for the final invoice, which keeps the wording identical.
Frequently asked questions
Can a quotation be legally binding?
In many jurisdictions an accepted quotation forms a contract for that scope and price. Include a validity period and clear assumptions so the offer does not stay open indefinitely.
When should I use a proforma invoice?
When a client needs a formal document to release funds or clear customs before you supply, but you do not yet want to book the revenue. Mark it clearly as proforma.
Do quotations need their own numbers?
Yes, in a separate sequence such as QUO-2026-011, so quotations never consume invoice numbers.
Sources and further reading
Rules differ by country. Confirm the details for your own situation with the official guidance below before relying on this article.
More reading: how to create an invoice, invoice numbering, payment terms, invoices vs quotations, common mistakes and small business invoicing. Practical questions are answered on the FAQ page.
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