Quotation vs Invoice: The Difference, and When to Send Each

Quotation vs invoice at a glance

The simplest test is timing: a quotation comes before the client says yes, an invoice after.

• Purpose: a quotation offers a price for a defined scope; an invoice asks for payment.
• Timing: a quotation is sent before the deal; an invoice when the work is supplied or a payment falls due.
• Binding: a quotation becomes an agreement only once the client accepts it; an invoice records a supply that has happened.
• Validity: a quotation has an expiry date; an invoice has a due date.
• Tax: a quotation is not a GST document; a tax invoice is, and your client may use it to claim input tax credit.

Where estimates and proforma invoices fit

Two more documents sit between them, and each has a narrow job.

• Estimate: a rough figure before the scope is clear. Useful early, but tell the client it may change.
• Quotation: a fixed price for a defined scope, open for a stated period.
• Proforma invoice: a request for payment, often the advance, issued once the client agrees and before the tax invoice. It is not a tax invoice.
• Tax invoice: the GST document for the supply, with the particulars the GST rules require.

The order to send them in

For a typical service job: estimate if the client asks for a ballpark, quotation once the scope is clear, then an invoice for the advance or the first milestone, and invoices for each later stage until the work is paid for.

Keep the line items identical from quotation to invoice. If the scope changes, revise the quotation first, so the invoice always matches a version the client accepted.

Practical tipWrite the payment schedule into the quotation. It tells the client in advance which invoices to expect and when.

What each document must contain

A quotation should have your details and the client’s, a number and date, line items with rates, taxes shown separately, the total, the payment terms, what is not included and a validity date. The website quotation format shows a worked example.

A GST tax invoice has a stricter list: your GSTIN, a unique serial number, the date, the client’s details (and GSTIN if registered), HSN or SAC codes, taxable value, tax rate and amount, and the place of supply. The GST invoice format guide lists every field.

Can a quotation be used as an invoice?

No. Even with the same lines and total, a quotation is an offer, not a record of supply, and it does not carry the particulars a tax invoice needs. Issue a proper invoice once the work is supplied or a payment is due, numbered in your invoice series.

Quotation to invoice without retyping

The common mistake is retyping: the invoice ends up with a different rate or a missing line. In WTS CRM, the client accepts the quotation from its link, and the accepted quotation converts into a GST invoice with the same lines, ready to send. Payments are then recorded against the invoice until the balance is cleared. See CRM with GST invoicing.