Quotation vs Invoice: What Is the Difference?

What is a quotation?

A quotation—sometimes called a quote or estimate—sets out what a business is prepared to supply, the proposed price and the conditions of the offer. It helps the customer decide whether to proceed.

A professional quotation normally includes the supplier and customer details, a unique quotation number, scope or item descriptions, quantities, prices, taxes where relevant, total quoted amount, validity period, delivery expectations and payment terms.

What is an invoice?

An invoice is a formal request for payment. It identifies what was supplied, the amount payable, the payment deadline and how the customer should pay. It also becomes part of the business’s sales and payment records.

An invoice normally includes a unique invoice number, issue and due dates, supplier and customer details, line items, subtotal, applicable taxes, final total, payment instructions, terms and any credits already recorded.

Can a quotation request payment?

A quotation may state that a deposit will be required after approval, but it is generally clearer to issue an invoice when payment is actually due. That invoice can reference the accepted quotation and request the agreed deposit or full amount.

Does approving a quotation create an invoice?

Approval confirms that the customer accepts the proposed scope, price and terms. It does not automatically make the quotation an invoice. The supplier should convert or graduate the approved quotation into a separate invoice when the agreed billing point is reached.

What changes when a quote becomes an invoice?

• The document receives its own invoice number.
• The validity date is replaced by a payment due date.
• Descriptions and quantities are updated to match what will be billed.
• The final tax treatment and total are confirmed.
• Payment instructions become actionable.
• The accepted quotation reference remains available for traceability.

Simple example

Which document should you send?

Send a quotation when the customer needs to review the price, scope or terms before agreeing. Send an invoice when payment has become due under the accepted agreement. If the offer changes before approval, revise the quotation rather than editing the old version without a record.