Invoice vs Quote: understand the key differences

Introduction: invoice vs quote

Invoice vs quote: are there any differences? Yes, there are some important differences.

Invoices and quotes are closely related and are both important for a business, but they serve different purposes. In this article, we’ll dive deeper into the differences between invoices and quotes, how important they are for a business, some best practices, and how you can automate your invoice processing to improve your business efficiency.

Understand the key differences between invoices and quotes

Although invoices and quotes are closely related to the sales process, there are some important differences between them. 

The quote comes first and belongs to the sales cycle. It is an estimated cost of the product or service which is sent to the potential customer before the sale is completed.

In contrast, the invoice is a document issued by the seller to collect payment. Therefore, it is only sent to the customer after the sales is completed and when the payment is due.

What is a quote?

A quote, also known as a sales quote, is a document that consists of a detailed breakdown of the estimated costs of a product or service. In other words, it’s a document you send to potential clients that includes an item-by-item breakdown of what is included in the quote and how much your product will cost. It provides all the costs, terms, and conditions related to the purchase of a product or service.

The quote is sent to the prospective customer by the seller before the sale is made. It provides a clear understanding of the scope, the specifications, and the price to allow potential buyers to decide whether they will close the deal or not.

This document is often valid within a predetermined period of time. This expiration date usually has a default value of 30 days after the sales quote is sent by the seller.

What should be included in a quote?

  • Your business information
  • The client’s information
  • Quote number
  • Issue date
  • Expiration date
  • Detailed description of products/services
  • Prices
  • Total amount
  • Payment terms
  • Terms and conditions
  • Contact information

What is an invoice?

On the other hand, an invoice is a document that is issued only after the sales is completed. Its main purpose is to collect payment for the services provided. It is usually sent to the buyer after the sale has been approved and finalized. 

The invoice consists of a detailed list of all the products or services, quantities, prices and the total amount due. In addition, it contains the payment terms and the due date.

Invoices are widely used by companies in all sectors and are a very helpful tool for businesses to request payments and manage their business transactions.

What should be included in an invoice?

  • Invoice number
  • Your business information
  • The client’s information
  • Issue date
  • Due date
  • Purchase order number
  • Detailed description of products/services
  • Prices
  • Total amount due
  • Payment terms and conditions
  • Contact information

Best practices: invoice vs quote

Best practices for sending quotes

When you write these documents, there are some best practices that can help you create effective sales quotes and invoices.

When you write a sales quote, you should:

  • Understand your customer needs: regardless of what product or service your potential customer is looking for, you should keep your customer in mind when creating your sales quote. Your goal is to offer a solution that will help your customers overcome their challenges, so you shouldn’t include any items that are irrelevant to the buyer.
  • Customize your quote: once you understand what your customer wants, you should customize your quote to their needs. This helps you build trust and shows the customer that you value their unique needs.
  • Be attentive to details: by paying attention to all the details, you can anticipate most problems. Make sure you include a detailed breakdown of everything that is included in the quote, all the costs involved and an expected timeframe.
  • Be clear: this could prevent all sorts of misunderstandings. Clarity is of the utmost importance because it aligns expectations and ensures that your message and intentions are accurately conveyed to your potential customer. This reduces the risk of misunderstandings significantly.
  • Send a quote within 24 hours: most of the time, your potential client will be requesting quotes from multiple suppliers. By sending a quote promptly, you demonstrate professionalism and increase your chances of being one of the first sellers to provide an offer. The sooner, the better. After all, if it takes you too long to send the quote, how long will it take you to deliver the products?

    Best practices for sending invoices

    There are also some best practices you can follow when you need to send invoices to clients.

    • Send invoices as soon as possible: an invoice has a due date, so it’s not a good idea to leave it to the last minute. If you want your invoice to be paid, give your customer enough time to do it. Sending invoices days or weeks before the due date demonstrates professionalism and helps you build trust with your client.
    • Include clear payment terms and conditions: when the payment terms and conditions are clear, you prevent any misinterpretations and ensure your client knows when and how they need to pay the invoice. 
    • Make sure your customer has received it: don’t forget to check if your customer has received the invoice. Sending the invoice via email does not guarantee that the recipient has received it. By asking for confirmation, you can prevent this problem from happening.
    • Automate your invoice processing: sending invoices manually can be not only time-consuming, but also prone to human errors. By automatically sending your invoices, you can save time and prevent these errors from happening.

    How to automate your invoice processing

    If you’re looking for a solution to automate your invoice processing, look no further than Sheetgo. Our fully automated invoice generator solution can help you generate customized invoices, convert them to documents and send them automatically via email.

    You will be able to streamline your invoicing process using tools you already know, such as Google Sheets, Google Docs and Gmail. You don’t need to be tech savvy or buy expensive software. 

    By using our invoice generator, you can generate personalized invoices with a few clicks and send them via email. 

    Ready to streamline your spreadsheet data?

    You may also like…