Estimate vs Quote vs Invoice: Which One to Send, and When

Make an estimate or quoteDownload the estimate, quote and invoice cheat sheet (PDF)

The short answer

An estimate is your best calculation of what a job will cost. It is useful when part of the job cannot be seen until you start: the state of the wiring behind a wall, how many hours a messy dataset will take to clean. The final bill can move, and the estimate should say what would move it.

A quote is a fixed price for the work it describes. Once the client accepts it, you do the work for that price unless the job changes. New Zealand's government consumer site describes a quote as an offer to do a job for a specified price, and says the business generally cannot charge more unless the client agrees to extra work or the scope changes. The same page says an estimate should generally land within 10 to 15 percent of the final price. That is New Zealand guidance rather than a universal rule, but it is a sensible yardstick anywhere.

An invoice asks to be paid. It is for work that has been agreed (a deposit invoice) or done (the final invoice), and it has a due date rather than a valid-until date. It is also a record you keep: the IRS lists invoices among the documents that support your gross receipts.

How the three fit together on one job

On a typical service job the documents come in order, and each one carries the numbers from the last.

1. The request. A client asks what something would cost.
2. Estimate or quote. You send one, not both. If you are not sure whether you can commit, start with an estimate and say what you need to see before you can fix the price.
3. Acceptance. The client signs, replies in writing, or accepts online. This is the moment the job is agreed, and the document they accepted is the one you will be held to.
4. Deposit invoice, if you take one. For the agreed deposit, referencing the accepted estimate or quote.
5. Changes. Anything new is priced and agreed in writing before you do it.
6. Final invoice. The accepted amount plus agreed changes, minus the deposit, with a due date.

Some people also send a proposal. A proposal is a quote with the reasoning around it: the problem, the approach, options at different prices, and the timeline. It is common in design, marketing and consulting, where the client is choosing between ways of doing the work rather than just a price. The price section of a proposal works exactly like a quote.

Step by step: making each document

1. Ask whether the price can move

Be honest with yourself about the unknowns. If the price depends on something you cannot see yet, you are writing an estimate. If you have seen enough to commit, write a quote. A fixed quote is easier for the client to say yes to, so it is worth one more question on the visit if that is all that stands between you and a fixed price.

2. Title the document to match

Print the word at the top. In the free estimate maker, the "Call it" setting switches the title between Estimate and Quote, and the number, date and valid-until date go underneath. A client should never have to guess which one they are holding.

3. Say what could change the price

On an estimate, name the unknowns in the Terms box: "The price assumes the boards under the carpet are sound; replacing boards would be extra." On a quote, list what is not included. The cheat sheet with this post has wording for both.

4. Get a signed yes

The PDF from the estimate maker has a line for the client to sign. A reply email that says "Yes, go ahead with quote 0012" works too. What matters is that the acceptance is in writing and names the document.

5. Turn it into an invoice

When the job is agreed or done, press "Turn it into an invoice". The free invoice generator opens with the client, items, tax and discount already filled in. Add any agreed changes, record the deposit as an amount paid, set the due date and download.

Mistakes that cause arguments

• Calling a fixed price an estimate to keep your options open. If the client reads it as fixed, you are in for a difficult conversation the moment it moves. Say which it is.
• An estimate with no unknowns named. If you do not say what could change the price, any change looks like a broken promise.
• Invoicing more than you quoted without a written change. The fix is cheap: an email that says what the change is and what it costs, and a reply that says yes.
• Retyping numbers between documents. Every retype is a chance to change a figure by accident. Carry the numbers across instead of typing them again.

If you send estimates and invoices every week, keeping all three documents on one record per client saves the hunt through email. A paid Fynl plan does that: a quote the client accepts online marks the lead as won and becomes the invoice. For occasional jobs, the free maker, the free invoice generator and a folder per client do the job. Our step-by-step estimate guide covers the site visit that comes before all of this.

The estimate maker is one of several no-sign-up tools on our free tools page, alongside the invoice generator and a QR code generator for your quotes and flyers.

Questions people also ask

Sources

• Consumer Protection (NZ government) — Quotes and estimates
• Community Law (NZ) — Quotes and estimates
• IRS — What kind of records should I keep
• Legal Information Institute (Cornell) — Offer