A quotation helps a customer decide whether to buy. An invoice records the amount payable after the sale or an agreed billing milestone. They can contain similar line items, but they serve different moments.
Quotation and invoice compared
| Question | Quotation | Invoice |
|---|---|---|
| When used | Before customer approval | After supply or billing milestone |
| Main purpose | Offer price and terms | Request and record payment |
| Typical status | Draft, sent, accepted, expired | Issued, due, paid, overdue |
| Validity | Usually time-limited | Usually has a payment due date |
A practical sales flow
- Discuss the scope, quantities, specifications, and expected delivery.
- Send a numbered quotation showing price, taxes, validity, and terms.
- Record customer approval and any changes to the offer.
- Supply the goods or services according to the accepted terms.
- Issue the appropriate invoice when the billing point is reached.
What belongs in a quotation?
- Seller and customer names and addresses.
- A unique quotation number and issue date.
- Item descriptions, quantities, rates, taxes, and discounts.
- Total amount, offer validity, delivery assumptions, and payment terms.
- A clear way for the customer to accept or request a revision.
What about a pro forma invoice?
A pro forma invoice is commonly used as a detailed pre-sale document in some commercial workflows. Its legal and tax treatment depends on the transaction and jurisdiction. When compliance matters, confirm the required document with a qualified accountant or tax professional.