Quotation vs. Invoice — What's the Difference?
By Tayyaba Rehman & Maham Liaqat — Updated on March 26, 2024
A quotation is an estimated cost proposal for goods or services, valid for a specific period, whereas an invoice is a request for payment post-delivery, detailing actual prices and terms.
Difference Between Quotation and Invoice
Table of Contents
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Key Differences
A quotation is a preliminary document provided by a seller to a potential buyer, offering an estimated price for goods or services before any commitment is made. It outlines the terms under which the sale could occur and is often used in the negotiation process. Whereas an invoice is issued after the sale is concluded, serving as a bill that details the actual amount due for payment by the buyer. It solidifies the terms of the transaction and specifies payment deadlines.
Quotations are not legally binding; they serve as a tool for budgeting and planning, allowing customers to compare prices and terms from different suppliers. They often include a validity period after which the terms may no longer be guaranteed. On the other hand, invoices are binding documents that demand payment for goods or services rendered, reflecting the agreed-upon prices and terms. They play a crucial role in accounting and financial management for both parties.
While a quotation may list itemized products and services with estimated prices, it can also include terms of sale, delivery charges, and validity period. This helps the buyer in decision-making and financial planning. An invoice, however, details the exact price of goods or services provided, including taxes, discounts, and net amount due, serving as a final record of the sale for both the buyer and the seller.
In the procurement process, quotations are requested during the planning and selection phase to assess and compare potential costs from various vendors. They help in making informed decisions about purchases. Invoices are issued at the end of the transaction cycle, facilitating the payment process and serving as a legal document for accounting purposes.
Quotations often precede the creation of a more formal agreement or purchase order once terms are agreed upon, acting as a precursor to the sale. Invoices, meanwhile, are generated after the agreement's terms are fulfilled, marking the completion of a transaction and the start of the payment obligation.
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Comparison Chart
Purpose
To provide an estimated cost before a transaction
To request payment after a transaction
Binding Nature
Not legally binding
Legally binding document for payment
Timing
Issued before a service or sale
Issued after a service or sale
Validity
Includes a validity period
Permanent record of the transaction
Detail Level
Estimated costs, may include validity and terms
Detailed actual costs, taxes, discounts, and net due
Role in Transaction
Facilitates decision-making and negotiations
Finalizes the transaction and initiates payment process
Accounting Impact
Used for budgeting and planning
Essential for financial records and management
Compare with Definitions
Quotation
An offer to sell goods or services under specified conditions.
We received three quotations before choosing a supplier.
Invoice
A bill for goods or services provided.
The monthly maintenance invoice arrived today.
Quotation
A non-binding proposal of cost.
The quotation is valid for 30 days.
Invoice
A record of a transaction.
The accountant filed the invoice for future reference.
Quotation
An estimated charge or cost.
The event planner sent a detailed quotation for the wedding reception.
Invoice
A document issued after the sale.
The invoice must be paid within 30 days.
Quotation
A document estimating the price of goods or services.
The contractor provided a quotation for the renovation project.
Invoice
A detailed statement of goods or services sold.
The invoice included a breakdown of all charges and taxes.
Quotation
A preliminary statement of price.
The quotation for the new software system was higher than expected.
Invoice
A request for payment under the terms of sale.
The invoice detailed all the purchased items and their prices.
Quotation
A quotation is the repetition of a sentence, phrase, or passage from speech or text that someone has said or written. In oral speech, it is the representation of an utterance (i.e.
Invoice
An invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.
Quotation
The act of quoting.
Invoice
A detailed list of goods shipped or services rendered, with an account of all costs; an itemized bill.
Quotation
A passage quoted.
Invoice
The goods or services itemized in an invoice.
Quotation
An explicit reference or allusion in an artistic work to a passage or element from another, usually well-known work
"Direct quotations from other paintings are fairly sparse" (Robert Hughes).
Invoice
To make an invoice of (goods or services).
Quotation
The quoting of current prices and bids for securities and goods.
Invoice
To send an invoice to; bill.
Quotation
The prices or bids cited.
Invoice
A bill; a commercial document issued by a seller to a buyer indicating the products, quantities and agreed prices for products or services that the seller has already provided the buyer with. An invoice indicates that, unless paid in advance, payment is due by the buyer to the seller, according to the agreed terms.
Quotation
A fragment of a human expression that is repeated by somebody else, for example from literature or a famous speech.
Invoice
The lot or set of goods as shipped or received.
The merchant receives a large invoice of goods.
Quotation
A price that has been quoted for buying or selling.
Let's get a quotation for repairing the roof before we decide whether it's worth doing.
Invoice
The price which a seller or dealer pays the manufacturer for goods to be sold.
Quotation
The act of setting a price.
Invoice
(transitive) To bill; to issue an invoice to.
I will invoice my supplier tomorrow.
Quotation
(obsolete) A quota, a share.
Invoice
(transitive) To make an invoice for (goods or services).
Quotation
The act of quoting or citing.
Invoice
A written account of the particulars of merchandise shipped or sent to a purchaser, consignee, factor, etc., with the value or prices and charges annexed.
Quotation
That which is quoted or cited; a part of a book or writing named, repeated, or adduced as evidence or illustration.
Invoice
The lot or set of goods as shipped or received; as, the merchant receives a large invoice of goods.
Quotation
The naming or publishing of the current price of stocks, bonds, or any commodity; also, the price named.
Invoice
To make a written list or account of, as goods to be sent to a consignee; to insert in a priced list; to write or enter in an invoice.
Goods, wares, and merchandise imported from Norway, and invoiced in the current dollar of Norway.
Quotation
Quota; share.
Invoice
An itemized statement of money owed for goods shipped or services rendered;
He paid his bill and left
Send me an account of what I owe
Quotation
A piece of hollow type metal, lower than type, and measuring two or more pica ems in length and breadth, used in the blank spaces at the beginning and end of chapters, etc.
Invoice
Send an bill to;
She invoiced the company for her expenses
Quotation
A short note recognizing a source of information or of a quoted passage;
The student's essay failed to list several important citations
The acknowledgments are usually printed at the front of a book
The article includes mention of similar clinical cases
Quotation
A passage or expression that is quoted or cited
Quotation
A statement of the current market price of a security or commodity
Quotation
The practice of quoting from books or plays etc.;
Since he lacks originality he must rely on quotation
Common Curiosities
Can the price in a quotation change?
Yes, the price in a quotation can change, as it is an estimate valid for a specified period.
Are quotations binding?
Quotations are not legally binding; they are estimates subject to change.
What details are included in an invoice?
An invoice includes details like actual prices, taxes, discounts, and the total amount due.
Why are quotations important?
Quotations are important for budgeting, planning, and comparing offers from different vendors.
How does an invoice affect accounting?
Invoices are crucial for financial records, management, and ensuring transactions are accurately documented.
When is an invoice issued?
An invoice is issued after goods or services are delivered, outlining the actual cost and payment terms.
What is a quotation?
A quotation is an estimate provided by a seller outlining the cost of goods or services before a sale.
What role does an invoice play in the sales process?
An invoice finalizes the sale, details the transaction, and initiates the payment process.
What is an invoice?
An invoice is a document requesting payment for goods or services provided, issued after a sale.
Can a quotation lead to a contract?
Yes, a quotation can lead to a contract or purchase order once both parties agree on the terms.
Do quotations include taxes?
Quotations may or may not include taxes; this depends on how the seller chooses to present the estimate.
How are invoices used in business transactions?
Invoices serve as a legal demand for payment and are essential for managing finances and accounts.
Can a buyer negotiate the terms of an invoice?
The terms of an invoice are usually not up for negotiation as they reflect agreed-upon terms; however, payment terms can sometimes be negotiated.
What happens if an invoice is not paid?
Non-payment of an invoice can lead to legal action, late fees, and affect business relationships.
Is it necessary to keep a record of quotations?
Yes, keeping a record of quotations is useful for reference, budgeting, and future negotiations.
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Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
Co-written by
Maham Liaqat
