The key difference between a quote and an invoice is that a quote is sent before a job to outline the total costs associated with the work. On the other hand, an invoice is sent after a job’s done to request payment.
But you shouldn’t be trying to choose one over the other. They both have a part to play in helping you win more jobs, get paid faster, and grow your business. Find out how quotes and invoices work together in this guide.
What is a quote?
A quote, also called a price quote or quotation, is a breakdown of the total costs for a job before it starts. The goal is to provide clients with a detailed estimate, helping to set expectations about how much a service will cost from the get-go.
Unlike an estimate, a quote is sent after you’ve visited a job site and have accurate information about material costs, property size and condition, and labor requirements.
Quotes must be approved by a client for a job to proceed. If a potential client doesn’t approve your quote, you can’t move forward with the work.
It’s important to note that quotes can change over the course of a job—they aren’t typically legally binding contracts. For example, if material costs go up, the project scope expands, or the work is a simpler fix than you initially thought.
READ MORE: Proposal vs quote: Which one should you use?
What’s included in a quote?
Most quotes are made up of the following elements:
- Material and labor costs
- Discounts, fees, and taxes
- A deposit, if required
- The date the quote is sent
- An expiration date
- Any relevant disclaimers
- A place for the client to sign
What is an invoice?
An invoice is a breakdown of the final cost of a completed job. It’s sent after the work has been done and details the total amount the client must pay for the services you provided.
If the project scope didn’t change, the amount of your invoice should reflect the amount of your quote, plus or minus any deposits, discounts, or fees.
An invoice doesn’t have to be approved by a client and can be sent any time after a job’s done.
Where quotes tell clients what they can plan to pay, an invoice tells them exactly how much is due.
What’s included in an invoice?
The most effective invoices have:
- An invoice date and due date
- An invoice number
- A breakdown of the services, materials, and charges (also called a line item)
- Payment terms, including your accepted payment method
- Client and company contact information
- The total amount due, including deposits, fees, taxes, late fees, and discounts
- A thank you note
How to make a quote
Because quotes are provided to clients before a job starts, they require some recon. To write a quote, follow these steps:
1. Visit the job site. This will help you calculate the labor and materials required, as well as any other fees, like permits.
2. Add up the costs. Next, add up the costs and include any discounts, like referral rates, or additional expenses.
3. Create a quote. Using the information from the job site and the costs you calculated, make a quote. You can either draft one manually in a program like Microsoft Word or Google Docs, use a free quote template, or use quoting software like Jobber.
Jobber lets you build customer-friendly quotes in minutes that include images of your products and services, or photos taken at the on-site assessment.
If you choose to send quotes manually, make sure to double-check spelling, numbers, and the total due for each client to prevent embarrassing errors and incorrect amounts.
4. Send your quote to the client. It’s best practice to send your quotes via email because they’re less likely to get lost in the mail or accidentally misplaced. And, using software like Jobber, clients can approve quotes straight from their inbox, making it easy for them to sign off so you can get started.
How to make an invoice
After a job’s done, it’s time to write an invoice. To create an invoice that encourages timely payments, be sure to:
- Refer to your quote. Your quote will inform your final invoice by showing you your initial calculation for a job. Check to see whether you had any additional expenses or if the job was less costly than anticipated.
- Create your invoice. As with a price quote, you can create an invoice manually, with an invoice template, or by using invoicing software. Using Jobber, you can pull the information from your quotes directly into your final invoices to save time and prevent miscalculations.
- Adjust the total. Fees, deposits, additional materials or labor, and other factors impact the total amount due on your invoice. Make sure to adjust the amount from your quote if it changed during the job or if the client paid part of the balance upfront.
- Send your invoice to the client. Once your invoice reflects not only the quote but the finished job, it’s time to send it to the client. Because invoices don’t require client approval, you can send them via email, text, or mail. However, email is the most common method to use.
With Jobber, clients will have the option to pay you online directly from their invoice using a credit card, helping you to get paid faster.
The benefits of using quotes and invoices together
When it comes to quotes vs. invoices, it’s important to understand that you don’t need to choose one over the other. Instead, they should work together to help your service business run smoothly and keep your clients happy.
By pairing up your quotes and invoices, you can take advantage of the following benefits:
- Your business will be more organized. By using separate documents to quote and bill clients, you know exactly where each customer is in your sales funnel at all times. Using quotes and invoices together helps you manage each client so you can stay on top of paperwork and send them the right communications, like quote follow-ups or late payment reminders.
- You’ll get paid faster. Detailed quotes tell clients how much they can expect to pay, helping them to budget and save as necessary. Then, when an invoice arrives for the same amount, they aren’t surprised about the cost, meaning they’re more likely to pay on time, and in full.
- You impress clients with your professionalism. Having a streamlined quoting and invoicing process doesn’t just make your accounting life easier. It also makes you look professional to your clients, showing that you’re a legitimate business that follows best practices. And the more professional you are, the happier your clients will be and the more likely you are to get glowing reviews.
- Your pricing will be more accurate. When you create a detailed quote after visiting a job site, it’s easier to make an invoice once the job’s done. Instead of estimating how much work you did, you’ll have an accurate overview of the expenses, letting you calculate your markup and profit margin beforehand to ensure the job is profitable. In turn, you’ll be sure to cover costs and have better cash flow once the invoice has been paid.
- You’ll have less paperwork. If you use software like Jobber to create your quotes, it’ll also do the heavy lifting for you when it comes to professional invoices. It can pull the information from a quote into an invoice so you won’t have to worry about creating a new document and copy/pasting each service and description.
Together, quotes and invoices make up a big part of your client communication strategy. By approaching them as quotes and invoices instead of quotes versus invoices, you’ll have happier clients and more opportunities to win jobs and get paid faster.
READ MORE: Learn the difference between invoices versus receipts, and how and when to use them
Originally published in August 2020. Last updated on September 20, 2024.