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Posted on Sep 5, 2025
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If you are a freelancer or small business owner, you will often come across the terms quotation and invoice. At first glance, they may look similar, but in reality they serve very different purposes in the business process.
A quotation is issued before the project starts, giving the client an estimated cost of services or products. An invoice, on the other hand, is issued after the project is completed, requesting payment for the work delivered.
Understanding the difference between quotation and invoice is important for maintaining professionalism, building trust with clients, and ensuring timely payments.
This guide explains both in detail, covering their components, benefits, differences, and how freelancers can manage them more effectively.
What is a Quotation?
A quotation is a formal cost estimate provided to a client before starting any work. It explains what products or services will be offered, the associated costs, and any terms and conditions. Unlike a casual price discussion, a quotation is a well-structured document that helps set expectations upfront.
For example, a website developer may send a quotation of ₹25,000 to a client for building a business website. Once the client accepts, both parties have a clear agreement about scope and cost.
In short, a quotation ensures clarity and avoids confusion before the project begins.
Source: InvoiceOwl Templates
Components of a Quotation
Your Business Details: Include your name, business name, email, and phone number so clients can easily reach you.
Client Information: Add your client's name and company details to personalize the quote and ensure it reaches the right person.
Quote Reference Number: Give each quote a unique number so you can easily track and reference it later in conversations or follow-ups or whenever needed.
Date and How Long It's Valid: Include today's date and let them know how long the quote is good for, typically between 15 to 30 days. This creates a gentle sense of urgency.
What You're Offering: Clearly explain the services or products you'll provide. Be specific enough that there's no confusion about what's included.
Pricing Breakdown: Show your costs either as individual line items or as a complete package price. Transparency here builds trust with potential clients.
Payment Expectations: Explain when and how you expect to be paid, whether you need money upfront, payments at certain milestones, or full payment upon completion.
Important Notes: Include any important details like what's not covered, special conditions, or clarifications that could affect the project. This helps prevent misunderstandings down the road.
Types of Quotations
Fixed Quote: This is a set price that you agree on upfront and stays the same once your client accepts it. Great for projects where you know exactly what's involved.
Estimated Quote: This gives you flexibility since the final price can change if the project scope shifts or unexpected issues come up. Perfect when you're not entirely sure what you'll encounter.
Itemized Quote: List each item or service with it’s individual price. This transparency helps clients see exactly what they're paying for and makes it easier to adjust if they want to add or remove something.
Package Quote: You can bundle multiple services or products into one complete package with a single price. This approach often feels like better value to clients and simplifies the decision-making process for them.
Each type works better for different situations, so choose the one that fits your project and gives both you and your client the clearest understanding of what to expect.
Benefits of Using Quotations
Clarity: You are able to set clear expectations about what you'll deliver and how much it costs right from the start. This prevents confusion and keeps everyone on the same page.
Professionalism: A well-written quote shows clients that you're organized and serious about your work. It builds their confidence in choosing you for the project.
Negotiation: Having everything written down gives both the parties a solid foundation to discuss changes or adjustments before any work begins. It makes conversations much smoother.
Protection: When scope and pricing are clearly outlined, it's much harder for projects to spiral out of control or for disputes to arise later. You're covering yourself professionally.
Reference Point: If questions or disagreements come up during the project, you can always refer back to the original quote to clarify what was agreed upon.
In short, a quotation protects both freelancers and businesses by creating a clear roadmap before any project begins. It's one of the smartest steps you can take to ensure smooth working relationships.
When Should Quotations Be Used?
Quotations should be used whenever a client asks for the cost of a product or service before committing to the project. They are most effective in the early stage of discussions when the client is still deciding whether to hire you.
Examples of when to use quotations include:
• A graphic designer sharing estimated charges for a company logo
• A web developer outlining the cost of building an e-commerce website
• A consultant providing a price estimate for a three-month advisory project
• A photographer quoting different packages for an event shoot
Using a quotation at this stage ensures that both you and your client agree on scope, price, and terms before any work begins.
What is an Invoice?
An invoice is a formal request for payment sent after work is completed or partially delivered. Unlike a quotation, an invoice is always a financial document that records the transaction and ensures the service provider gets paid.
For example, once a graphic designer completes a logo design, they send an invoice of ₹15,000 to the client with a 15-day payment deadline. This invoice acts as both a request for payment and an official record of the transaction.
In short, an invoice ensures that your work translates into timely income.
Source: Canva
Components of an Invoice
Invoice Number: Assign a unique number to each invoice to facilitate easy tracking of payments and maintain organized records.
Date of Issue: Include the date you're creating and sending the invoice. This helps establish the payment timeline.
Your Business Information: Add your name, business name, email, and phone number so clients know exactly who to pay and how to reach you.
Client Information: Include your client's name and company details to make sure the invoice reaches the right person and department.
Description of Services: Summarize the work completed or products delivered. Keep it clear so there's no question about what they're paying for.
Pricing and Total Amount: Provide a proper structure of the costs and show the final amount due. This transparency helps clients understand exactly what they owe.
Payment Terms: Specify when payment is due, whether that's within 7, 15, or 30 days. Clear deadlines help you get paid on time.
Payment Instructions: Include your bank details, online payment links, or other ways clients can pay you. Make it as easy as possible for them to send money.
Notes or Conditions: Add any important messages like thank you notes, tax information, or policies about late fees. This is also a good place to maintain a positive relationship with your client.
Steps in the Invoicing Process
Work Completion: Finish the project or reach the milestone you agreed on with your client. Make sure everything is delivered according to your original agreement.
Invoice Creation: Put together a detailed and professional invoice that clearly shows what you've completed and what payment is due.
Invoice Delivery: Send the invoice to your client through email or your invoicing software. Make sure it reaches the right person who handles payments.
Client Review: Your client will review the invoice and check it against the work you delivered to make sure everything matches up.
Payment Processing: Once approved, your client sends payment using the method and timeline you specified in your payment terms.
Confirmation and Record Keeping: Confirm that you've received the payment and file the invoice in your records for accounting and tax purposes.
When Should Invoices Be Used?
Invoices should be used once the work is delivered, or when a milestone in a larger project is completed. They are not optional but a necessary step to secure payment and maintain proper financial records.
Examples of when to use invoices include:
• A content writer billing a client after delivering a set of blog posts
• A software developer requesting payment after completing Phase 1 of a project
• A marketing consultant sending a monthly invoice for retainer services
• A freelancer billing international clients after submitting final deliverables
An invoice is the client’s official signal to release payment, making it critical for both income and record-keeping.
Difference Between Quotation and Invoice
Timing: You send a quotation before starting any work to give your client an idea of costs. An invoice comes after you've completed the work and are ready to get paid.
Purpose: A quotation helps your client understand what they'll need to budget for the project. An invoice is your formal request for payment once the work is done.
Binding Nature: Your quotation only becomes a commitment once your client accepts it. An invoice, however, is always a legal document that shows money is owed for work already completed.
Client Action: When you send a quotation, your client can accept it, reject it, or ask to negotiate the terms. With an invoice, your client's responsibility is straightforward: they need to pay the amount due.
Content: Quotations focus on explaining what services you'll provide, how much they'll cost, and what terms apply. Invoices concentrate on the final amount owed and exactly how your client should pay you.
Quick Comparison Table
Feature | Quotation | Invoice |
Timing | Sent before work begins | Sent after work is completed |
Purpose | Provides estimated cost | Requests payment |
Binding Nature | Binding only once accepted | Always a legal financial record |
Client Action | Accept, reject, or negotiate | Pay the amount due |
Focus | Services, pricing, and terms | Payment details, amounts, deadlines |
How is Infinity Helping with Invoices and Quotations?
For freelancers, SMEs, and exporters creating quotations and invoices by hand takes way too much time, especially when you're working with clients from other countries. That's where Infinity comes in to make things simple.
Infinity helps you make professional invoices in just a few minutes, send them straight to your clients, and see all your payments in one place. The best part is getting paid from international clients in just one day, and it only costs 0.5%.
By making invoices easy to handle, Infinity saves you time, reduces headaches, and gets your money to you faster. You can spend more time on your actual work instead of worrying about getting paid.
You can also check the amount you will receive in INR after converting any foreign currency before actually receiving the payments. Click here to know more!
Final Thoughts
Quotations and invoices might look like simple documents, but they're the backbone of successful freelance relationships. A quotation sets clear expectations upfront, while an invoice ensures you actually get paid for your work.
Getting these two documents right can make or break your freelance business. They protect you from scope creep, payment disputes, and confused clients who don't understand what they're paying for.
Platforms like Infinity take the headache out of managing payments by streamlining your entire invoicing process. You can create professional quotes, send invoices instantly, and get paid faster without the usual back and forth that delays your money.
FAQs
Can a quotation be used as an invoice?
No. A quotation is only an estimate, while an invoice is a formal payment request.
Do I need both a quotation and an invoice for every project?
Yes. A quotation sets expectations, and an invoice ensures payment.
Can I edit a quotation after sending it?
Yes, but it is best to issue a revised version and clearly mark it as updated.
Do freelancers have to include tax in invoices?
It depends on local tax laws. In India, freelancers may need to include GST if applicable.
How does Infinity simplify quotations and invoices?
Infinity lets freelancers create, send, and track invoices while also enabling fast international payments, often within one day.
