Quotes, estimates and invoices

These four documents carry the same information in nearly the same layout, which is why they get muddled. What separates them is not the fields — it is what the reader is entitled to assume after reading. Getting that wrong at the start of a job is expensive at the end of one.

The four, in the order they occur

Estimate

A considered guess. It says: based on what I understand so far, this is roughly what the work will cost. An estimate signals that the figure can move, and it is the right document when the scope is genuinely not settled — a renovation before anybody has opened a wall, a project before the requirements exist.

The thing that makes an estimate useful rather than evasive is saying what would move it. "Estimate: 4,000. This assumes the existing data can be migrated as-is; if it needs cleaning, that is separate work we would quote before starting." A number with its assumptions attached is something a client can act on. A number with "estimate" written above it and nothing else is a number they will remember as the price.

Quote

A firm price for a described scope. It says: do this exact thing and it costs this exact amount. A quote is the document to send when you know what the work is, and the client is generally entitled to hold you to it if they accept it while it stands.

Two fields do most of the work on a quote and both are commonly missed. The first is an expiry date — a quote without one is a price you offered indefinitely, and they will come back with it in eight months. Thirty days is a normal window. The second is the scope description, which is what you are actually pricing; the number means nothing without it, and disputes about quotes are almost never about the figure.

Proforma invoice

An invoice-shaped document sent before the work or before payment, usually because the client's system needs something invoice-shaped to raise a payment against. It looks like an invoice and is labelled so it is not mistaken for one.

It is not a request for payment of money already owed, and it should not take a number from your invoice sequence — the sequence is a record of what you actually billed, and putting a document in it that may never become a real invoice is how gaps appear. Number proformas separately, or not at all. Invoice numbering covers why that sequence is worth protecting.

Invoice

A demand for payment of an amount now owed, with a date by which it should arrive. The work is done, or the agreed stage of it is, and the money is due. Everything about the document — the due date, the payment details, the description — exists to get that payment made without anybody needing to ask you a question first. Once it is paid, the document that confirms it is a receipt, and invoice vs receipt covers when a client needs one.

The distinction that costs money

Between an estimate and a quote there is a real difference in what the client may reasonably assume, and it does not depend on which word you used in the email. A detailed figure, broken down by line, sent after a long scoping conversation, reads as a quote no matter what the heading says. If you mean it to be movable, the document has to say what moves it.

The failure is nearly always the same shape: a figure given quickly and informally, meant as a ballpark, treated by the client as the price. Then the work turns out to be larger, and the conversation you are having is not about the extra work — it is about whether you are going back on something. That conversation is much harder than the one you would have had by writing two sentences of assumptions at the start.

Turning one into the next

A quote that is accepted does not become an invoice by itself. When the work is done you raise a separate document, with its own number and its own date, for the amount agreed. Keep the quote — it is the evidence of what was agreed, and it is the first thing you will want if the invoice is ever queried.

If the quote covered several stages, each stage gets its own invoice as it completes, rather than one at the end. Deposits and progress billing covers how to split it. To work out the figures for a job with several rates or a deposit already taken, the invoice calculator does the arithmetic and hands it to the editor.