A quotation proposes the work. An invoice requests payment.
Small businesses sometimes use "quotation" and "invoice" as if they mean the same thing. They have different jobs in the usual sales process.
A quotation sets out the work or products offered and the proposed price. An invoice lists the amount due and tells the customer how and when to pay, based on the terms agreed for the job.
What goes in a quotation?
A quotation, also called a quote or estimate, is usually sent before work begins. It describes what you plan to provide, the proposed price, and how long the offer is valid.
The customer can accept it, decline it, or ask you to revise the scope or price. Keep a copy of the version the customer accepted so both sides can refer to the same details.
What goes in an invoice?
An invoice is sent when payment is due, such as after work is completed or when an agreed project milestone is reached. It identifies what was supplied, the amount due, the payment terms, and the payment instructions.
The due date and amount should match the terms agreed with the customer. If a customer has a question about the invoice, resolve the issue against the accepted quotation, contract, or other records for the job.
Key differences
| | Quotation | Invoice | |---|---|---| | When it is sent | Before work begins | When payment is due | | Purpose | Propose scope and price | Request payment | | Customer's next step | Accept, decline, or ask for changes | Pay or raise a question | | Amount | Proposed price | Amount due under the agreed terms | | Validity or due date | Often includes a quote expiry date | Includes payment terms or a due date |
A typical workflow
Lead Inquiry
↓
Send Quotation
↓
Customer Approves
↓
Deliver Service / Product
↓
Send Invoice
↓
Receive Payment
The exact timing can vary. For example, a business may invoice a deposit before work begins or bill at an agreed project milestone. Put those terms in writing before the work starts.
Common mistakes
Sending an invoice before confirming the price and scope.
The customer may not understand what the invoice covers. Confirm the work and price first.
Starting work without a written record.
A written quotation or agreement gives both sides a reference for the scope and price.
Leaving quotations open indefinitely.
Include a validity date so customers know how long the quoted price applies.
How Oomli links quotations and invoices
With Oomli, you can create a quotation, send it to the customer, track its status, and convert an approved quotation into an invoice. You can then follow the invoice's payment status.
Manage quotations and invoices in one place.
No credit card required. Free to get started.
Further reading
- Free quotation software Malaysia
- How to follow up quotations
- Invoice tracking and payment follow-up