Quotation vs invoice vs proforma invoice
A quotation proposes a price before the work or sale is locked in. An invoice asks for payment for what was delivered. A proforma invoice is a preview-style bill used in some trade and banking flows, not a substitute for either of the first two. Pick the document that matches the stage you are in, then keep the numbers consistent when you move from quote to bill. The quotation maker builds the first document in your browser. When you later need a bill, follow how to create a simple invoice.
This page is general information for naming and sequencing documents. It is not legal, tax, or contract advice. Rules for invoices, proforma forms, and tax lines vary by country.
What each document is for
Quotation (quote). Send one when a client asks what the job would cost. Include your business, their details, line items, optional discount and tax, an issue date, and a valid-until date. The goal is a proposed total they can accept or revise, not a request to pay for completed work.
Invoice. Send one when you are billing for delivered goods or services under an agreed price. You still need who bills whom, a number, a date, and line totals, but the purpose is a payment request. Building that PDF is covered in the simple invoice guide linked above.
Proforma invoice. Many exporters and suppliers use a proforma as a preview of amounts and goods for customs, banking, or buyer approval before a commercial invoice exists. It can look like a bill without being the receivable you book later. Required fields differ by trade lane and local practice.
Short sequence: quote to agree the price, deliver the work, invoice to collect. Use a proforma only when trade paperwork asks for that preview.
Side by side
| Document | Typical stage | Main job |
|---|---|---|
| Quotation | Before commitment | Propose price and scope |
| Invoice | After delivery (or agreed milestones) | Request payment for agreed amounts |
| Proforma invoice | Before shipping or banking steps in some trades | Preview amounts and goods |
If a buyer asks for a “proforma” while scope is still open, clarify whether they want a price proposal or a preview bill for a defined shipment.
Worked example: quotation totals
Use a two-line USD quote so the discount-before-tax order is easy to check.
| Line | Qty | Unit price | Line subtotal |
|---|---|---|---|
| Brand kit | 1 | 800 | 800 |
| Revision rounds | 2 | 120 | 240 |
- Subtotal = 800 + 240 = 1040.
- Apply a 10% document discount: 10% of 1040 = 104. Taxable amount = 1040 minus 104 = 936.
- Apply a 5% tax the user typed (not a built-in rate): 5% of 936 = 46.80.
- Grand total = 936 + 46.80 = 982.80.
The quotation totals library returns the same chain: subtotal 1040, discount 104, taxable 936, tax 46.80, grand total 982.80. Discount lands before tax. Tax is only the percent you enter. Set valid-until strictly after the issue day; the tool blocks a same-day or earlier expiry.
When to use which
Send a quotation when scope is still open, you need a valid-until window, or the client asked for a formal price before approving work. Keep descriptions specific enough that acceptance matches the deliverables you typed.
Send an invoice when the price is agreed and you are billing for what you delivered. Reuse the quote’s line amounts so the bill does not invent a new total.
Send a proforma invoice only when your trade or buyer process asks for that preview document. Do not assume it replaces a clear quote or a commercial invoice everywhere.
Common mistakes
Calling a quote an invoice in the email subject. The client may book a payable too early, or ignore a real bill later.
Skipping valid-until on a time-sensitive price. A clear end date keeps both sides honest about when the proposed total still stands.
Applying tax before discount in your head. The on-site quotation math discounts the subtotal first, then taxes the reduced amount. The opposite order will not match the PDF.
Copying a proforma into the books as if it were a commercial invoice. Treatment is a local question. Keep document types distinct in your folder names.
Omitting the “not a contract” context. The tool’s editable disclaimer is a clarity aid, not a substitute for counsel.
Try the quotation numbers
Open the quotation maker, enter the two lines, choose a 10% discount, type tax 5, and confirm 982.80 before you export. Then change only the tax percent and watch the taxable base stay at 936.
For a field-by-field packing list, continue with what to include in a quotation.
Frequently asked questions
Is a quotation the same as a contract?
No. A quotation proposes price and scope. Whether accepting a quote creates binding terms depends on your agreement and local rules. The on-site tool includes an editable line that the document is not a contract.
When should I switch from a quote to an invoice?
After the parties agree and you are billing for delivered work or goods, issue an invoice with the agreed amounts. Keep the quote number in your notes so the two documents stay matched.
Does every country use proforma invoices the same way?
No. Customs, banks, and buyers treat proforma documents differently by jurisdiction and industry. Confirm local practice before you rely on one for shipping or banking paperwork.
Can the quotation maker create an invoice?
No. It builds quotations with issue and valid-until dates. For a bill after delivery, use the invoice generator with the agreed line amounts.
How does the worked example reach 982.80?
Lines total 1040. A 10% discount removes 104, leaving 936 taxable. A 5% tax on 936 adds 46.80. Grand total is 982.80, matching the quotation totals library.
Is this legal or tax advice?
No. Document names and tax treatment vary by country and contract. Treat these definitions as general orientation only.
Related articles
Generators
What to include in a quotation
Use this quotation checklist: parties, quote number, dates, line items, optional discount and tax, notes, terms, and a clear not-a-contract line. Walk a 626 total example.