People use these words loosely, but they mean different things and have different consequences. Using the right one avoids confusion, and sometimes disputes.
Estimate
An estimate is your best guess of the price. It is not a promise. Use it when the scope is uncertain, for example repair work where you will not know the full job until you open things up. State clearly that the final price may differ, and say by how much you expect it to vary.
Quote
A quote is an offer at a fixed price for a defined piece of work. If the client accepts, you are expected to do the work at that price. Include what is covered, what is not, how long the offer is valid and your payment terms. Our Quote Generator builds one in a few minutes.
Pro forma invoice
A pro forma invoice looks like an invoice but is a preliminary one. It is issued before goods are delivered or work is done, so the client can pay in advance, arrange a customs declaration, or obtain approval. It is not a demand for payment in the accounting sense, and it is not recorded as a sale. When the work is done, you issue the real invoice and note the pro forma it replaces.
Invoice
An invoice is a formal request for payment for work done or goods delivered. It is recorded as income in your accounts and carries a number, a due date and tax details. It is the document the client's accounts team will pay and file.
Receipt
A receipt is proof that payment has been made. Issue one when the client pays, especially for cash and card payments. It shows the date, the amount, what was bought and how it was paid. Use our Receipt Maker if you do not already have a system for this.
A simple order of events
A typical project goes: estimate or quote, acceptance, purchase order from the client if they use one, optional pro forma for an advance payment, delivery of the work, invoice, payment, receipt. You do not need every step every time, but knowing the order helps you choose the right document.
Tools for this guide
More tips
- What to Put on an Invoice: A Checklist
- Ten Ways to Get Paid Faster as a Freelancer or Small Business
- Invoice Numbers: How to Number Your Invoices Sensibly
- Payment Terms Explained: Net 30, Due on Receipt and Everything Between
- Credit Notes: When to Use One and How to Write It
- How to Chase a Late Payment Without Damaging the Relationship
- Purchase Orders Explained for Small Businesses
- VAT, GST and Sales Tax on Invoices: The Basics
- Hourly, Day Rate or Fixed Price: How to Price Freelance Work
- Keeping Invoice and Receipt Records: What to Keep and for How Long
- Invoicing Clients in Other Countries and Currencies
- Tracking Billable Time So You Never Under-Bill Again
- Your First Invoice: A Calm Guide for New Freelancers
- All tips and guides
These guides are general information to help you get paid and stay organised. They are not legal or tax advice. Rules differ by country and change over time, so check with your tax authority or an adviser.