Quote vs Invoice: Differences, Pro Forma Invoices and Examples
By QuotApp Team · Published August 1, 2026 · Updated October 16, 2026
A quote is sent before the work to propose a price; an invoice is sent during or after the work to request payment. The quote asks “do you accept this price?” and the invoice says “this amount is now due.” Well-run small businesses convert an accepted quote directly into an invoice with the same line items, which keeps billing predictable and disputes rare.
Quote vs invoice: the full comparison
| Quote | Invoice | |
|---|---|---|
| Timing | Before work starts | After acceptance (deposit), during (progress) or after work (final) |
| Purpose | Win the job at a stated price | Collect payment |
| Legal role | An offer; can form a contract once accepted | A demand for payment under an existing agreement |
| Accounting role | None until accepted; not recorded as revenue | Recorded as revenue and accounts receivable (accrual basis) |
| Numbering | Its own series, e.g. Q-2026-041 | A separate sequential series, e.g. INV-2026-077 |
| Dates | Issue date and expiry date | Issue date and due date |
| Payment terms | Proposed (deposit, schedule) | Specific (due date, late fee, accepted methods) |
| Tax | Shown as an estimate of what will be charged | The tax actually charged and owed to the state |
| Can it change? | Yes, until accepted; revise with a new version | Corrected with a credit memo or a new invoice, not by editing |
Two rows in that table matter most. First, a quote is not income and does not belong in your books as revenue; an invoice usually does (on cash-basis accounting, revenue is recorded when payment arrives, but the invoice is still the record). Second, the tax on an invoice is real. Sales tax rules for services and materials differ widely between states, so confirm with your state’s revenue department or your accountant what you must charge.
Estimate vs invoice
An estimate is an approximate price, so the gap between an estimate and the final invoice can be larger than the gap between a quote and its invoice. That is expected, but it needs a paper trail. When the invoice will exceed the estimate meaningfully, get written approval before you finish the work and reference that approval on the invoice. For the difference between estimates and quotes themselves, see quote vs estimate.
What is a pro forma invoice?
A pro forma invoice is a preliminary invoice sent before goods are delivered or work is done. It looks like an invoice, with seller and buyer details, line items, quantities, prices and terms, but it is not a demand for payment and is not recorded as a sale.
It is used when the buyer needs an invoice-shaped document before the real one exists:
- A client’s purchasing department needs it to raise a purchase order or approve a prepayment.
- Goods are being shipped internationally and customs or the buyer’s bank needs a declared value in advance.
- The buyer wants to see exactly how the final invoice will look, including tax and shipping.
Pro forma invoice vs quote: both come before the sale. A quote is your offer and invites acceptance. A pro forma invoice usually comes after the buyer has agreed in principle and says, in effect, “this is what the invoice will be.” Mark it clearly as “Pro Forma Invoice” and do not give it a number from your regular invoice series, so it is never confused with an actual bill.
Deposit invoices and progress billing
Most jobs over a few hundred dollars should not wait until the end to be billed.
Deposit invoice. Issued as soon as the quote is accepted, referencing the quote number. It covers materials and commits the client to the schedule. Common deposits range from 10% to 50% depending on the trade and how much material you must buy up front. Some states cap deposits on home improvement contracts, so check local rules before setting yours.
Progress billing. For longer jobs, invoice at defined milestones: rough-in complete, cabinets installed, substantial completion. Each progress invoice should show the contract total, the amount billed to date, and the remaining balance, so the client always sees where they stand.
Final invoice. The original quoted items, plus approved change orders, minus deposits and progress payments already received.
Worked example: converting an accepted quote into invoices
An illustrative landscaping job. Prices and the 6% tax rate are examples only; in this example, tax applies to materials but not to labor.
Quote Q-2026-041 (accepted April 2):
| Line item | Qty | Unit price | Amount |
|---|---|---|---|
| Sod, material (sq ft) | 1,200 | $0.65 | $780.00 |
| Sod installation labor (sq ft) | 1,200 | $1.20 | $1,440.00 |
| Soil prep and grading | 1 | $480.00 | $480.00 |
| Irrigation head adjustment | 1 | $260.00 | $260.00 |
| Debris haul-away | 1 | $150.00 | $150.00 |
| Subtotal | $3,110.00 | ||
| Tax (6% on materials, $780) | $46.80 | ||
| Total | $3,156.80 |
Terms: $1,250 deposit on acceptance, balance due within 15 days of completion.
Deposit invoice INV-2026-077 (April 2): “Deposit per accepted quote Q-2026-041: $1,250.00. Due on receipt.”
During the job, the client asks to extend the lawn by 200 sq ft. You write change order CO-1 for $370 plus tax on the material, and the client signs it on April 9.
Final invoice INV-2026-083 (April 12):
| Line item | Amount |
|---|---|
| Quote Q-2026-041 items (as quoted) | $3,110.00 |
| CO-1: Additional sod, material, 200 sq ft × $0.65 | $130.00 |
| CO-1: Additional installation labor, 200 sq ft × $1.20 | $240.00 |
| Subtotal | $3,480.00 |
| Tax (6% on materials, $910) | $54.60 |
| Total | $3,534.60 |
| Less deposit (INV-2026-077) | −$1,250.00 |
| Balance due by April 27 | $2,284.60 |
The client can match every line to a document they already agreed to: the quote, the change order, the deposit. Nothing on the final invoice is a surprise. A good quote template makes this conversion a copy-and-rename job, and the free quote maker keeps the line items intact when you move from quote to invoice.
What an invoice needs that a quote does not
- Invoice number in an unbroken sequence. Gaps raise questions in an audit; void an invoice rather than deleting it.
- Due date and payment terms, such as “Net 15” or “Due on receipt.”
- Accepted payment methods: check, ACH, card, with any card surcharge disclosed where permitted.
- Reference to the quote or PO number, which many business clients require before they will pay.
- Late payment terms, if you charge them, matching what the quote or contract said.
Record-keeping
Keep the quote, the client’s acceptance (signature or email), every change order, and every invoice and receipt together under one job number. If a client disputes a charge months later, you can show the chain: offer, acceptance, approved change, bill, payment. For tax purposes, the IRS publishes guidance on how long to keep business records; a sensible habit is to hold job files at least as long as the related tax records, and to ask your accountant what that means for you.
Also keep the quotes you lost. Your win rate, average job size and how often clients push back on price all come from those files, and they make your next estimate better. If you are still building your process, how to write a quote for a job covers the front end and quote acceptance covers the hand-off between the two documents.
FAQ
Can an invoice be higher than the quote?
Only for changes the client approved, ideally in a signed change order, or for allowances and unit-price items the quote said would be billed at actual. Otherwise the accepted quote price stands.
Is a quote the same as a pro forma invoice?
No. A quote is an offer that invites acceptance. A pro forma invoice previews the final invoice after the buyer has agreed in principle, often so they can arrange a purchase order, prepayment or customs paperwork.
Should quotes and invoices share a number sequence?
Keep them separate. Use one series for quotes and another for invoices, and reference the quote number on each invoice so the documents link together.
Do I charge sales tax on the quote or the invoice?
Tax is collected on the invoice, when the sale happens. Show the expected tax on the quote so the client sees the real total, and confirm your state’s rules on taxing labor and materials.