Invoice vs quotation: which document, and when
Send the wrong one and you either ask for money you have not earned or give away work you never priced. The difference is about timing and obligation, not formatting.
The short answer
A quotation usually comes first. It sets out what you will do, what it costs, and how long the price holds. Whether it becomes binding depends on the agreed terms and local law.
An invoice requests payment for goods supplied, services delivered, or an agreed deposit or advance. Its accounting and tax treatment depends on the transaction and the rules that apply to your business.
Side by side
| Quotation | Invoice | |
|---|---|---|
| When | Before agreeing the work or price | When requesting payment, including an agreed deposit |
| What it does | Offers a price | Asks for payment |
| Obligation | Depends on the terms and local law | Records a payment request |
| Key date | Valid until | Due date |
| Customer response | Accept, reject or ask to revise | Pay, query or dispute |
| Tax treatment | Check the rules for your transaction | Check the rules for your transaction |
The fields that are genuinely different
Most of both documents is the same: who is selling, who is buying, the line items, the quantities, the unit prices, the per-line discount and tax, and the totals. The differences are few and they are the ones that matter.
On a quotation and not on an invoice
- Valid until — the date the price stops being an offer. Without it a quote is open indefinitely, which is a liability when your own costs move.
- A reference — the customer's enquiry or RFQ number, so their buyer can match your offer to their request.
- Terms and conditions — what the price assumes, what is excluded, and what happens if the scope changes.
- A status that can be rejected — a quotation is draft, sent, accepted, rejected or expired. An invoice has no "rejected".
On an invoice and not on a quotation
- A due date — and, with it, the payment term. See how to write payment terms.
- A date of supply — when the goods or service were actually delivered, which is not always the day the invoice was raised.
- Payment instructions and bank details — a request for money that does not say where to send it will be paid late.
- Payment method — cash or credit, which some tax regimes require to be stated on the face of the document.
- Both parties' tax and registration numbers — a business buyer's accounts department will check them.
Quotation, estimate, proposal, RFQ, pro forma
Four of these get used interchangeably and should not be. The distinction is how binding the number is.
| Document | What it commits you to |
|---|---|
| Estimate | An informed guess. The final figure is expected to move. |
| Quotation | A fixed price for a defined scope, until the valid-until date. |
| Proposal | The approach and the price. Sells the method as well as the number. |
| RFQ | Nothing — it is the buyer asking you for a quotation. |
| Pro forma invoice | A priced document for payment in advance. Not a tax invoice. |
Turning a saved quotation into an invoice
With the premium invoicing suite, an eligible saved quotation can become an invoice without retyping the lines. It uses the saved business profile for the letterhead, logo and tax number, while keeping the quotation's chosen currency.
Build the quotation
Open the Quotation Generator, add the lines, set a valid-until date, and download or send the PDF.
Record the acceptance
Keep acceptance in writing — for example, an email that refers to the quotation number — so you can show the agreed scope and price later. Whether it forms a binding agreement depends on your agreement and local law.
Convert an eligible saved quotation
Open an eligible saved quotation and use its invoice action. Check the customer, dates, payment terms and notes before issuing the new invoice. Get acceptance before issuing where that is required by your agreement or local rules.
Set the due date from the terms you agreed
Not from habit. If the quotation said 30 days, the invoice says 30 days.
What these tools will not do
- Conversion is premium. Turning an eligible saved quotation into an invoice without retyping the lines is part of the premium invoicing suite; on the free plan the lines are copied by hand.
- Payment tracking on an invoice is held by the browser, not the account. Marking an invoice paid is remembered on the device you did it on. Clear the browser data or move to another machine and that state is gone, even though the invoice itself is saved.
- No chasing. Nothing sends a reminder when a due date passes.
- No accounting ledger. These produce documents; they are not a bookkeeping system, and they do not file anything with anyone.
Frequently asked questions
- Can a customer refuse to pay an invoice because they never saw a quotation?
- They may dispute the invoice, especially if there is no quotation or clear record of the agreed scope. A written acceptance that refers to the quotation helps evidence the agreement; its legal effect depends on your terms and local law.
- How long should a quotation stay valid?
- Long enough for the customer to decide and short enough that your costs have not moved. Thirty days is the common default; on anything where materials or exchange rates matter, shorter is safer. The field is yours to set.
- Can I invoice before doing the work?
- For a deposit or an advance, yes — though in several tax systems the correct document for a request for prepayment is a pro forma invoice, with the tax invoice following the supply. Check what your own rules require.
- Do both documents need a number?
- Both need a clear unique identifier. In BuzPulse, leaving the invoice number blank lets the system assign an automatic number; a number you type is retained when it is unique within the company. Keep a documented sequence so the records remain easy to trace.
- Can I issue these in Arabic?
- New invoices and quotations can be created in English or in English + Arabic. Arabic-only quotation records created before this option changed remain available to view, print and export.
The tools behind this
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About the author
Naeem Ahmed builds and runs BuzPulse. These guides describe tools he has built, and they describe how those tools actually behave — including where they stop.
Corrections and questions: naeem@buzpulse.com
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