Quotation, estimate, proforma or invoice: which to send
Four documents that look alike and commit you to very different things. What each one means, when to send it, and why sending the wrong one costs money.
5 min read · updated
These four get used interchangeably in conversation, which is fine right up until a client holds you to a number you thought was indicative. The distinction is about how binding the figure is and whether money is now owed.
| Document | What it says | Is payment due? |
|---|---|---|
| Estimate | Roughly this much, subject to a closer look | No |
| Quotation | Exactly this much, valid until a stated date | No |
| Proforma invoice | This is what the invoice will say, for approval or advance payment | Not yet |
| Invoice | This is owed, by this date | Yes |
Estimate
An approximation given before you know enough to be precise. A contractor who has not seen the site, a repair before the unit is opened. The word estimate is doing real work here: it signals that the number can move. If you send an estimate and the final bill is higher, you have a conversation. If you called it a quotation, you may have an argument.
Create an estimateGive clients a clear, itemised cost estimate.Quotation
A firm price for a defined scope, open for a stated period. Two things make a quotation safe to send: a scope specific enough that both sides know what is included, and an expiry date. Without the expiry, a quote you sent eighteen months ago at last year costs is still, arguably, live.
Create a quotationSend professional price quotes clients can approve fast.Proforma invoice
A preview of the invoice, usually so the buyer can raise a purchase order, arrange an advance, or clear customs. It looks like an invoice and contains the same figures, but it does not create a receivable and should not be entered as one. Label it clearly, or somebody will pay it twice: once against the proforma and once against the real invoice.
Invoice
The demand for payment. It carries a unique sequential number, a due date and, if you are registered, the tax breakdown. This is the document that goes in your books as revenue and in theirs as a payable.
Create an invoiceCreate clean, professional invoices with a live preview and instant PDF.The sequence in practice
- Client asks roughly what something costs. Send an estimate.
- Scope firms up. Send a quotation with a validity date.
- They accept and need paperwork for their finance team. Send a proforma if asked.
- Work is delivered. Send the invoice, referencing the quote.
- They pay. Send a receipt so the payment is acknowledged against a specific invoice.
Referencing the earlier document at each step is the small habit that prevents most billing disputes. An invoice that cites the quotation it came from is much harder to argue with than one that arrives with a fresh number.