Quick answer
A quotation is normally sent beforeafter
Document names and legal requirements differ by country, business type, and contract. Check your local tax and record-keeping rules.
Invoice vs Quotation: What Is the Difference?
Both documents help businesses communicate prices, but they are used at different stages. Learn what to send, when to send it, and what details to include.
Invoice and quotation compared
| Point | Quotation | Invoice |
|---|---|---|
| Purpose | Offers a proposed price and scope. | Requests payment for a completed or agreed sale. |
| When used | Before the customer accepts the work or purchase. | After delivery, at a milestone, or as agreed in the contract. |
| Price | Usually an estimate or offer, often time-limited. | Final amount due, including applicable taxes and discounts. |
| Payment terms | May state deposit or acceptance terms. | States due date, payment method, and outstanding balance. |
| Document number | Quotation/reference number. | Unique invoice number for accounting records. |
What to include
In a quotation
- Your business name and contact details
- Customer name and contact details
- Quotation number and issue date
- Clear description of goods or services
- Quantity, unit price, taxes, and total estimated price
- Validity date, exclusions, delivery terms, and acceptance instructions
In an invoice
- Unique invoice number, invoice date, and payment due date
- Seller and customer details required for your records
- Agreed line items, quantities, prices, discounts, and taxes
- Total amount due and accepted payment method
- Tax registration details where legally required
Typical workflow
- Discuss the customer’s need.
Confirm the requested scope, quantities, timeline, and any assumptions. - Send a quotation.
Use a clear quote number and state how long the price is valid. - Receive acceptance.
Keep written confirmation, purchase order, or contract where appropriate. - Deliver the goods or service.
Keep delivery or work-completion records. - Issue the invoice.
Reference the agreed scope or quotation when useful, and state payment terms.
Practical example
Quotation: A graphic designer quotes ₹15,000 for a logo package, valid for 15 days, with two revision rounds and 50% advance payment.
Invoice: After the client approves the logo, the designer issues an invoice for the remaining ₹7,500, referencing the quotation number and showing the payment due date.
If the scope changes, send a revised quotation or written change approval before issuing an invoice for additional work.
Frequently asked questions
Is a quotation legally binding?
That depends on the wording, acceptance process, contract, and local law. A quotation may become binding when accepted. Use clear terms and seek professional advice for contracts or disputes.
Can I create an invoice from a quotation?
Yes. Reuse the accepted line items, then change the document title, add the invoice number and due date, and make sure the total reflects the actual agreed transaction.
Should a quotation include tax?
Show whether tax is included or excluded, and display applicable taxes according to your local requirements. Do not use a tax rate unless it applies to your business and transaction.
Can an invoice be issued before work is completed?
Yes, if you agreed on an advance, deposit, pro forma, or milestone payment. Clearly label and document the payment terms.
Privacy and limitations
Use correct customer and business information, and protect documents containing addresses, tax numbers, bank details, or payment data. EditGenApp provides document templates and general information, not accounting, tax, or legal advice. Consult a qualified local professional for compliance requirements.