Quotation vs Estimate vs Invoice: What Each One Means and When to Send It

Quick answer

An estimate is an approximate price that can change. A quotation is a fixed offer for a defined scope, valid for a set period. An invoice is the bill you send once the work is done or a milestone is reached. The usual order is estimate (optional), then quotation, then invoice.

Definitions

• Estimate: a rough cost based on what you know now. It is useful when scope is unclear, for example "Website build: ₹80,000 to ₹1,10,000 depending on the number of pages".
• Quotation (quote): a firm price for a clearly described scope, with terms and a validity date. Once accepted, it acts as the commercial agreement.
• Invoice: a demand for payment for what was delivered, with tax shown correctly. Here is what an invoice must contain.

The order in practice

1. A prospect describes a need. You send an estimate if details are still open.
2. After a discovery call you fix the scope and send a quotation with a validity date (for example 15 days).
3. The client accepts the quotation in writing or by paying an advance.
4. You deliver, then raise invoices as per the payment schedule in the quotation.

Worked example

A Hyderabad web studio receives a request for a restaurant website.

• Estimate (Day 1): "₹60,000 to ₹90,000 for a 5 to 8 page site."
• Quotation (Day 4): 6 pages, online menu, contact form, 2 revision rounds: ₹75,000 plus 18% GST. Valid till 30 days. Payment: 40% on acceptance, 40% on design approval, 20% on launch.
• Invoice 1: 40% of ₹75,000 = ₹30,000 + GST ₹5,400 = ₹35,400.
• Invoice 2: ₹30,000 + GST ₹5,400 = ₹35,400.
• Invoice 3: ₹15,000 + GST ₹2,700 = ₹17,700.
• Total billed: ₹88,500, which equals ₹75,000 plus 18% GST.

From accepted quote to invoices

Once a client accepts, the quotation becomes your billing plan:

1. Record the acceptance: a signed copy, an email saying "approved", or the advance payment.
2. Raise each invoice exactly as the payment schedule says, quoting the quotation number on the invoice.
3. If you take an advance before the work starts and you are registered, issue a receipt voucher for it. Our guide to invoices and receipts explains how.
4. Bill any extra work as a separate line or a separate invoice, with its own written approval.

Handling change requests

Scope changes are where quotations protect you. When a client asks for something outside the quote, reply with a short written change note: what is being added, the price, and the effect on the timeline. Once they approve it, add it to the next invoice as its own line, such as "Additional menu page (change request 2, approved 12 Nov)". The finance team can then match every line to an approval.

What to include in a quotation

• Scope written as deliverables, not effort
• Exclusions (for example "copywriting not included")
• Number of revisions
• Price, GST treatment and payment schedule
• Timeline and validity date
• Acceptance line or signature block

Common mistakes

• Calling a rough estimate a "quotation" and then being held to it.
• No validity date, so a client accepts an old price months later.
• Invoicing amounts that do not match the accepted quotation.
• Forgetting to bill change requests that were outside the quoted scope.

Frequently asked questions

Next step

Write your next quote with a validity date and a payment schedule. In PikZiy Books, customers accept or decline a quote from a private link, and an accepted quote becomes an invoice in one click.

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