Quote vs Invoice: Understanding the Difference
Many business owners confuse quotes and invoices—but using the wrong document at the wrong time can cause payment delays and client confusion. Let's clarify the differences and when to use each.
What is a Quote?
A quote (or quotation) is a document that:
- Estimates the cost of goods or services
- Is sent BEFORE work begins
- Is NOT a request for payment
- May or may not be legally binding (depending on terms)
- Can be accepted, rejected, or negotiated
Purpose: Help clients decide whether to hire you
What is an Invoice?
An invoice is a document that:
- Bills for completed work or delivered goods
- Is sent AFTER work is done (or per agreement)
- IS a formal request for payment
- Is legally binding once accepted
- States exact payment amount and due date
Purpose: Request payment for services rendered
Key Differences: Quote vs Invoice
Timing
Quote:
- Sent before starting work
- Used during sales/negotiation phase
- No work has been performed yet
Invoice:
- Sent after work is completed (or per payment schedule)
- Work has been performed
- Payment is due
Legal Status
Quote:
- Not a demand for payment
- May include "valid for 30 days" clause
- Client can accept, reject, or negotiate
- Prices may change if not accepted quickly
Invoice:
- Legal demand for payment
- Client is obligated to pay (assuming they accepted services)
- Terms and pricing are final
- Late payment may incur fees
Information Included
Quote Includes:
- Estimated costs
- Scope of work
- Timeline estimate
- Validity period ("Quote valid for 30 days")
- Terms and conditions
Invoice Includes:
- Exact charges
- Work completed
- Invoice number
- Due date
- Payment instructions
- Late payment terms
Language
Quote Language:
- "Estimated cost"
- "Proposed services"
- "If you proceed"
- "Quote valid until..."
Invoice Language:
- "Amount due"
- "Services rendered"
- "Payment due by..."
- "Total amount owed"
When to Use a Quote
1. New Client Inquiries
Client asks: "How much would it cost to...?" → Send a quote
2. Project Bids
Competing for a project with other providers → Send a quote
3. Uncertain Scope
Project requirements aren't fully defined → Send an estimate/quote
4. High-Value Projects
Client needs approval from others before proceeding → Send a detailed quote
5. Custom Work
Every project is different and requires custom pricing → Send a quote
When to Use an Invoice
1. After Work Completion
You've delivered the service or product → Send an invoice
2. Milestone Payments
According to your payment schedule → Send an invoice
3. Recurring Services
Monthly retainers or subscriptions → Send invoice each billing period
4. After Quote Acceptance
Client approved your quote and you've done the work → Send an invoice (reference the quote)
5. Upfront Deposits
Client wants to pay deposit to secure your services → Send an invoice for the deposit amount
Quote to Invoice Workflow
Step 1: Client Inquiry
"Can you design a logo for my business?"
Step 2: Send Quote
QUOTE #Q-2025-045
Logo Design Package
Research & concepts: $300
Design development: $400
Revisions (up to 3): $200
Final files & formats: $100
TOTAL QUOTED: $1,000
Quote valid for 30 days.
50% deposit required to begin work.
Step 3: Client Accepts
"Yes, let's proceed!"
Step 4: Request Deposit
INVOICE #2025-045-DEPOSIT
Logo Design - Deposit
50% deposit to begin work $500
Due: Upon receipt
Balance due upon completion
Step 5: Complete Work
Design logo, get client approval
Step 6: Send Final Invoice
INVOICE #2025-045-FINAL
Logo Design Package - Balance
Total project cost: $1,000.00
Less deposit paid: -$500.00
BALANCE DUE: $500.00
Due: Upon receipt
Quote Example
QUOTATION
From: Creative Designs Co.
To: ABC Business Inc.
Quote #: Q-2025-012
Date: January 15, 2025
Valid Until: February 15, 2025
PROJECT: Website Redesign
PROPOSED SERVICES & ESTIMATED COSTS:
Homepage redesign $800
5 interior pages $1,500
Mobile responsive design $400
Contact form integration $200
Basic SEO optimization $300
1 month post-launch support $300
ESTIMATED TOTAL: $3,500
Payment Terms (if accepted):
- 50% deposit ($1,750) to begin
- 50% balance ($1,750) upon completion
Timeline: 4-6 weeks from deposit receipt
This quote is valid for 30 days. Prices may change after February 15, 2025.
To accept this quote, please reply via email or sign below.
_________________ __________
Signature Date
Invoice Example
INVOICE
From: Creative Designs Co.
To: ABC Business Inc.
Invoice #: 2025-012
Date: March 1, 2025
Due Date: March 16, 2025 (Net 15)
PROJECT: Website Redesign (Per Quote Q-2025-012)
SERVICES PROVIDED:
Homepage redesign $800.00
5 interior pages $1,500.00
Mobile responsive design $400.00
Contact form integration $200.00
Basic SEO optimization $300.00
1 month post-launch support $300.00
Additional Services:
Blog setup (not in original quote) $400.00
SUBTOTAL: $3,900.00
TAX: $0.00
TOTAL: $3,900.00
Payment Schedule:
✓ Deposit (50%): $1,750.00 Paid: 1/20/2025
Balance Due: $2,150.00 Due: 3/16/2025
Payment Instructions:
Bank Transfer: [Account details]
PayPal: payments@creativedesigns.com
Late payments subject to 1.5% monthly interest.
Common Mistakes to Avoid
❌ Mistake #1: Using "Invoice" for Estimates
Problem: Sending an "invoice" before work starts confuses clients Solution: Use "Quote" or "Estimate" for pre-work pricing
❌ Mistake #2: Not Referencing the Quote in Invoice
Problem: Client forgets what they agreed to Solution: Include "Per Quote #Q-2025-012 dated January 15"
❌ Mistake #3: Changing Prices from Quote to Invoice
Problem: Client feels deceived if final invoice is higher Solution:
- Honor quoted prices
- Or send revised quote before starting work
- Or clearly state "Additional services: $X"
❌ Mistake #4: No Quote Expiration Date
Problem: Client accepts quote months later when your prices have increased Solution: Always include "Quote valid for 30 days"
❌ Mistake #5: Invoicing Before Work Starts
Problem: Legally problematic and confusing Solution: Use quotes before work, invoices after
Tips for Quotes
1. Be Detailed
Break down costs so clients understand value
2. Set Expiration
"Quote valid for 30 days" protects you from price changes
3. Include Scope
Clearly define what's included and what's not
4. Add Terms
"50% deposit required to begin work"
5. Make Acceptance Easy
Include signature line or "Reply to accept" instruction
Tips for Invoices
1. Reference the Quote
"Per Quote #Q-2025-045 accepted on January 15, 2025"
2. Be Specific
Detail exactly what was delivered
3. Show Deposits
Always deduct deposits paid from total
4. Clear Due Date
"Due: March 15, 2025" not "Due: Net 30"
5. Easy Payment
Include multiple payment method options
Quote and Invoice Generator Tools
Why Use a Generator?
For Quotes:
- Professional appearance
- Consistent formatting
- Easy to create multiple versions
- Can save as templates
For Invoices:
- Automatic calculations
- Sequential numbering
- Professional PDFs
- Quick creation
What to Look For:
- ✅ Separate templates for quotes and invoices
- ✅ Ability to convert quotes to invoices
- ✅ Customizable terms and conditions
- ✅ PDF download
- ✅ No signup required
Frequently Asked Questions
Can a quote become an invoice?
Yes. Once the client accepts your quote and you complete the work, you convert the quote into an invoice. Reference the original quote number on the invoice.
Do I need both a quote and an invoice?
Not always:
- Regular clients with standard pricing → Invoice directly
- Small, fixed-price services → Invoice directly
- New clients or custom projects → Quote first, then invoice
Is a quote legally binding?
It depends on:
- Your terms and conditions
- Local laws
- Whether it was accepted by the client
Generally, quotes are binding once accepted, but can include terms allowing price adjustments.
Can I charge more than the quote?
Only if:
- Scope changed (client requested additional work)
- Quote clearly stated "estimate subject to change"
- Client approved additional costs before proceeding
Best practice: Send a revised quote before doing extra work.
How long should quotes be valid?
Common periods:
- Standard services: 30 days
- Volatile markets (materials): 14 days
- Large projects: 60-90 days
- Custom work: 30-45 days
What if the client wants to negotiate the quote?
Quotes are negotiable! You can:
- Adjust pricing
- Modify scope
- Offer payment plans
- Send a revised quote
Once both parties agree, that becomes your working agreement.
Conclusion
Use a Quote when:
- ✅ Client is deciding whether to hire you
- ✅ You're competing with other providers
- ✅ Scope or pricing isn't finalized
- ✅ You haven't started work yet
Use an Invoice when:
- ✅ Work has been completed
- ✅ Client owes you money
- ✅ It's time for a scheduled payment
- ✅ You're requesting a deposit after quote acceptance
Understanding the difference between quotes and invoices helps you communicate clearly with clients, get paid faster, and maintain professional standards.
Create Quotes and Invoices Now
- Generate Quote Free → - Create professional quotations
- Generate Invoice Free → - Create professional invoices
- View Templates → - See sample quotes and invoices
Last updated: December 2024