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

People use "quote" and "invoice" as if they were the same thing, and for a lot of small jobs that works fine until something goes wrong. Then the difference matters. A quote is what you offered before the work. An invoice is what you're owed after it. This guide covers what each one does, what to put on it, and the order they belong in.

What is a quote?

A quote, sometimes called a quotation or an estimate, tells a potential client what a job will cost before any work starts. A few things are worth knowing about it:

• It's an offer. Until the client accepts it, they have no obligation to pay anything.
• It should carry an expiry date. Quotes commonly run for somewhere between 14 and 30 days.
• The client can accept it, decline it or negotiate.
• It is not a tax invoice, so nobody can use it to claim input VAT.
• Once the client accepts, you have an agreement. Get the acceptance in writing. A reply by email or WhatsApp is enough.

What a good quote contains

A quote that's easy to accept gets accepted faster. It should have a quote number and the date, your business details and the client's, and a "valid until" date. Below that sits an itemised list of what you'll do or supply, with a price for each line. State whether the prices include VAT, because a client who reads R10,000 as the total and then receives an invoice for R11,500 will feel misled even though you never hid anything. If you take a deposit, say how much and when. Add your payment terms and what counts as acceptance, such as a reply, a signature or a paid deposit.

Say what is not included as well. "Excludes materials" or "excludes travel outside Gauteng" is far easier to write at quote stage than to explain once the invoice is higher than expected.

What if the job changes after the quote?

Jobs change. The client adds a room, a second revision or a bigger print run. Don't absorb the extra work quietly and hope the invoice sorts it out. Send a short revised quote or a written variation, get a yes by email or WhatsApp, and then do the extra work.

The law backs this up in some trades. Where you repair or maintain a consumer's property, the Consumer Protection Act says you can't charge more than your estimate unless you've told the consumer about the additional cost and they've authorised the work to continue. You also can't charge for preparing an estimate unless you disclosed that price first and the consumer agreed to it. Most jobs aren't repairs, but the habit is a good one for all of them.

What is an invoice?

An invoice is a formal request for payment, issued once you've done the work or delivered the goods. The client's duty to pay comes from the agreement you reached. The invoice records what is owed.

• You issue it after delivery of the goods or services.
• It states an amount the client has agreed to pay.
• If you're VAT registered, it must meet SARS requirements (see our tax invoice checklist), and SARS expects you to issue it within 21 days of the supply.
• If you account on an accrual basis, you usually record it as income when you issue it.
• Together with your quote or agreement, it's your evidence if you ever have to collect.

For VAT, the time of supply is generally the earlier of two events: you issue the invoice, or you receive payment. That's why sending an invoice before you've finished can pull VAT into an earlier period than you expected.

The correct order: quote, then job, then invoice

Send a quote, get written acceptance, do the work, then invoice. Skipping straight to an invoice, before the price has been agreed, is how most disputes start. The client sees a number they never saw before, and your only defence is that they should have known.

In Invo, an accepted quote converts into an invoice in one click. The line items carry over and the invoice number is generated for you. Our guide to creating an invoice covers what goes on it, and the features page shows how quoting and invoicing work together. If you'd like to see what a quote looks like when it's done well, our guide to writing a quote goes through one section by section.

What about a proforma invoice?

A proforma invoice looks like an invoice but isn't a tax invoice. Businesses use one to ask for a deposit or prepayment before the work begins, which is common in construction, events and manufacturing. It sits between the two documents: the client has accepted your price, but you aren't yet claiming payment for finished work.

Mark it "Proforma" clearly so nobody mistakes it for a tax invoice. The client can't use it to claim input VAT, and when you eventually issue the real tax invoice, it should show any deposit already paid.

Quick reference: which one do you need?

The short version

Use a quote when the price is still being agreed, an invoice when the work is done, and a proforma only when you need money before the work starts. Put an expiry date on every quote, get acceptance in writing, and put any change to the price in writing too.