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Quote against invoice against proforma
A quote offers a fixed price before the work, and binds you once accepted. An invoice demands payment for work already delivered and creates a debt. A proforma looks like an invoice but is not a tax invoice: it is a statement of what an invoice will say, used for deposits, prepayments and customs, and it cannot be used to claim tax credits.
The three look similar on the page and behave completely differently in an argument about money. Sending the wrong one is a surprisingly expensive habit.
Nuwan Madhusanka · Co-founder
3 min read · Published
| Quote | Invoice | Proforma | |
|---|---|---|---|
| Sent | Before the work | After delivery | Before payment, before supply |
| Creates | An offer, binding once accepted | A debt owed to you | Nothing enforceable |
| Tax | No tax point | Creates the tax point | Not a tax invoice |
| Can be claimed by the buyer | No | Yes | No |
| Changes to it | Reissue before acceptance | Credit note after issue | Replace with the real invoice |
A quote is an offer with a shelf life
Once accepted, a quote is a price you are held to, which is why every quote should carry a validity date and say what is included. Materials move, and a quote with no expiry can be accepted six months later at a price you can no longer buy at. Where something genuinely cannot be priced yet, carry it as a stated allowance rather than pretending to a number, and say how it will be adjusted.
An invoice creates a debt and a tax point
Issuing an invoice is not just asking for money; in most systems it fixes when the transaction is recognised for tax. That is why you cannot simply delete one that turns out to be wrong: the correction is a credit note that reverses it, leaving both documents in the record. It is also why an invoice needs the specific details the tax authority requires, which for a tax invoice usually means your identifier, the date, what was supplied and the tax amount.
A proforma is a promise of an invoice
It is used when somebody needs a document before the supply exists: to get a deposit approved, to open a letter of credit, to clear customs, or to give a buyer's finance team something to raise a purchase order against. It carries the same lines as the invoice will, and it is explicitly not a tax invoice, so the buyer cannot claim against it. When the goods ship or the work completes, the real invoice follows.
Questions people ask
Can a quote become an invoice?
In practice you issue a new document rather than converting one, because they have different jobs and different required fields. The sensible workflow is to keep the accepted quote as the record of what was agreed and issue an invoice that references it, so the two can be matched later.
Is an estimate the same as a quote?
No, and the word you print decides which one it is. A quote is a fixed price you are bound to; an estimate is a considered guess that can move and must say so. Labelling a document a quote and then describing it as indicative in the small print is the worst of both.
Can I claim tax on a proforma?
No. A proforma is not a tax invoice and cannot support a credit claim, which is exactly why the real invoice has to follow. A buyer whose finance team tries to process a proforma as an invoice will usually be stopped by their own controls.
What if I need to change an invoice?
Issue a credit note that reverses it, in whole or in part, then invoice again correctly. Editing or deleting the original breaks the audit trail and, where the invoice has already fixed a tax point, is not something you can do unilaterally.
How long should a quote stay valid?
Thirty days is the usual answer and it should be printed on the quote. If a customer comes back after it, reissue at current prices rather than honouring the old one; that is easier when the original is kept as its own saved document.
Do I need a purchase order number on the invoice?
If your customer uses them, yes, and it is the single most common reason an invoice sits unpaid. Ask for the number before you invoice rather than after, because chasing it later means your invoice waits in a queue nobody is looking at.
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Create a document with OneCraftRelated questions
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- Mutual against one way NDAA one way NDA protects one discloser. A mutual NDA protects both. Which to use, and why sending the wrong one costs more time than it saves.
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