Quote vs invoice: what is the difference and when to send each

A quote is an offer: here is the work, here is the price, here is how long the price stands. An invoice is a request for payment: this work has been done, this amount is owed, here is the date it is due and where to send the money. The quote comes first and creates no debt. The invoice comes after and does.

Most of the confusion between them is harmless right up until it is not. Sending a quote and then waiting to be paid means waiting for a document that never asked anyone for money. Sending an invoice before the customer has agreed to anything usually means an awkward phone call and a document you have to cancel.

General information, not tax advice. The ATO is the authority - see ato.gov.au or ask a registered tax or BAS agent.

The difference in one line each way

A quote looks forward. It describes work that has not happened, at a price you are offering to be held to, for a period you nominate. There is no due date, because nothing is owed yet. It ends in an acceptance, not a payment.

An invoice looks back. It names work already delivered, states the amount payable, and carries a specific due date and the details needed to pay it. Once issued and accepted as correct, it is the document the amount owed is claimed under.

One practical consequence: an invoice can be a tax invoice, and a quote never is. If you are registered for GST, the document you send after the work is a tax invoice with a specific set of required fields. A quote with the words “tax invoice” on it is a genuine error, not a cosmetic one, because a customer’s bookkeeper may enter it as a payable and it will not match anything later.

Is a quote binding?

In plain terms, a quote is generally treated as an offer, and when the customer accepts it on the terms stated, the two of you usually have a contract on those terms. That is why what the quote says matters more than most people give it credit for: the price, the scope, the exclusions and the payment terms are not preamble, they are the deal. This is general information rather than legal advice, and for a large or unusual job a lawyer is the person to ask.

Three things commonly end or change an offer before it becomes anything:

• Expiry. A validity period (“this quote is valid for 30 days”) gives the offer an end. Without one, a customer can come back in eight months and reasonably expect the same price on materials that have since gone up.
• Withdrawal. An offer can generally be withdrawn before it is accepted, which is worth knowing if you quoted in a hurry and your costs have moved.
• A change to the scope. A customer who accepts “but can you also do the back fence” has not accepted your quote, they have proposed a different job. That is a new price, not a favour.

There is a consumer-law layer on top of all this when you work for households rather than businesses. The ACCC’s guidance on setting prices is blunt: businesses must not mislead consumers about what they will be charged or why. Where you advertise or display a price to consumers, its price display rules also require a total price that includes taxes, duties and all unavoidable or pre-selected extra fees, though prices shown only to other businesses do not have to include GST. A quoted figure that quietly becomes a larger figure at invoice time is the situation those rules exist to address.

What belongs on each document

No general law prescribes the contents of a quote, which is why quotes vary so wildly. Regulated work is the exception: for residential building work most states set out what a written contract must contain once the job passes a threshold, which the trade-job quote guide on this site covers. business.gov.au’s prepare quotes page lists what a written quote should include at a minimum: your business name, ABN and contact details, the customer’s name and contact details, a clear description of the work, itemised and total costs including GST if applicable, any variations and revisions discussed, payment terms and conditions, your preferred payment method, start and finish dates, a quote expiry date, and space for the customer’s acceptance.

The invoice side is prescribed. The ATO’s tax invoices page sets out 7 details a tax invoice for a taxable sale under $1,000 must show clearly enough to be determined, with the buyer’s identity or ABN required as well once the sale reaches $1,000. If you are not registered for GST, you issue a plain invoice instead, which must not say “tax invoice” or show a GST amount. Both cases are covered in how to invoice as a sole trader.

The asymmetry is the useful takeaway. The invoice is the document with legal fields; the quote is the document that decides whether the job is profitable.

Estimate or quote?

An estimate is an informed approximation. A quote is a price you are offering to stand behind. The difference is not the formatting, it is what you are promising, and the customer will assume whatever suits them unless the document says which one it is.

Say it in the document, in the same words each time. “Estimate only, based on the information available on 3 October; final price depends on what we find once the wall is open” is a different promise from “Fixed price, valid 30 days”. Where the work genuinely cannot be priced in advance, quoting a rate plus a not-to-exceed figure gives the customer a ceiling without pretending to a certainty you do not have. How to write a quote that wins work covers what else earns a yes.

Deposits, and the point where a quote becomes an invoice

On anything substantial, the quote is not the last document before the work starts. Once the customer accepts, a deposit is invoiced like any other amount: its own invoice, its own number, referencing the quote it belongs to, so the paperwork reads as one job rather than two unrelated documents.

That deposit invoice is a real invoice and behaves like one. If you are registered for GST, it is a tax invoice with the same required fields as any other. The balance is invoiced at the end, showing the total, the deposit already paid, and the amount now owing, so the customer can see the arithmetic without doing it.

Converting a quote to an invoice without errors

Retyping is where the money leaks out. The failures repeat across every trade and profession:

• Invoicing the original quote total after variations were approved, so the extra work is free.
• Line items retyped from memory, with a quantity or a rate slightly off.
• The quote’s validity date copied across as the invoice’s due date.
• The quote number reused as the invoice number, which breaks two sequences at once. Quotes and invoices need separate, unique numbering, as in invoice numbering rules and systems.
• The heading left as “Quote”, or not changed to “Tax invoice” when it needed to be.

The reliable fix is not care, it is not retyping. If the accepted quote becomes the invoice, the line items, quantities, rates and client details carry across intact, and the only things you change are the ones you meant to change.

How Apsis helps

In Apsis a quote and an invoice are the same line items in two states. When a quote is accepted, it converts into an invoice carrying the description, quantities and rates you already agreed, with its own invoice number rather than the quote’s. Quotes and invoices are both on the free plan, which covers 5 clients and 20 invoices a month, and share the same client records, so the quote a customer accepted in March is still attached to the job when you invoice it in June, and you can see which quotes are still open, accepted or expired.