Quotation vs Invoice: What's the Difference and When to Use Each

Quotations and invoices are both essential business documents, but they serve very different purposes. Using the wrong one at the wrong time can create confusion and delay payments.

What is a Quotation?

A quotation (also called an estimate or quote) is a document you send before work begins. It outlines:

• The scope of work or products
• The proposed price
• Validity period (e.g., "valid for 30 days")
• Terms and conditions

A quotation is not a request for payment. It's a proposal that the client can accept, reject, or negotiate.

What is an Invoice?

An invoice is sent after work is completed or goods are delivered. It's a formal request for payment that includes:

• Invoice number and date
• Itemized list of goods/services delivered
• Total amount due
• Payment terms and due date
• Payment methods accepted

The Workflow

1. Send quotation → Client reviews and approves
2. Do the work → Deliver the product or service
3. Send invoice → Request payment for completed work
4. Receive payment → Record and reconcile

Can You Convert a Quotation to an Invoice?

Yes! With Billify, you can convert an accepted quotation into an invoice with one click. All the line items, pricing, and customer details carry over automatically. No re-typing needed.

Pro Tips

• Always get quotation approval in writing (email is fine) before starting work
• Number your quotations separately from invoices (e.g., EST-001 vs INV-001)
• Set quotation expiry dates to create urgency
• Include your terms and conditions on both documents