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Invoice vs. Estimate: What's the Difference?

Save time and create your invoice with our invoice generator.

No matter what the nature of your business is, you should know that estimates and invoices are crucial for accounting organization, looking professional, and ensuring your cash flow stays optimal. Although estimates and invoices share many similarities, they serve very different purposes. In this article, we will answer the following questions:

  1. What is an Estimate?
  2. What is an Invoice?
  3. What is the Difference Between an Invoice and Estimate?
  4. How Do I Create an Estimate using Invoicer.ai?
  5. How Do I Turn an Estimate into an Invoice using Invoicer.ai?

Read on to learn everything there is to know about estimates and invoices and the benefits of billing automation with Invoicer.ai. 

What Is an Estimate?

An estimate or quote is a document a seller gives to a buyer that indicates the cost of goods and services the seller will provide. A professional business estimate is not a binding agreement, allowing the buyer to opt-out and request changes at any time.

What Is an Invoice?

An invoice is a legal document that records the transaction between a seller and a buyer. It is a detailed breakdown of the provided products or services rendered, including quantities, costs, and specific payment terms. 

What is the Difference Between an Invoice and an Estimate?

An estimate is a quote for goods and services, so it does not seek payment and is not an amount owed. The sole purpose of a business estimate is to inform customers of costs for the proposed goods and services they have requested. By receiving an estimate, your customer has the freedom to choose if they want to proceed with the sale or discuss any changes.

An invoice is a formal billing statement for a completed sale. It is the legal document used to request payment from a client for the goods or services they received from a buyer. A professional invoice is a detailed record that shows what was purchased, how much is owing, how the amount owed should be paid, and specific terms and conditions of the transaction.

How Do I Create an Estimate Using Invoicer.ai?

Invoicer.ai offers the perfect estimate solution for any business. Our intuitive and robust Estimator Generator automates and simplifies the process and makes creating and managing estimates a breeze. The platform saves you time by enabling quick entry of client accounts and required estimate information. The client can accept the detailed cost estimate online, reducing the need for follow-up calls or emails and streamlining the process of estimate acceptance. 

To create a stunning and professional estimate using the Invoicer Estimate Generator, complete the following steps:

  1. Head to Invoicer.ai and select Estimate Generator.
  2. Complete the “From” details like your company logo, address, and phone number.
  3. Choose an Existing Client or add a New Client profile by filling in the information.
  4. Date Assigned is automatically the day you create the estimate, and the Date Due defaults to 30 days from the issue date. 
  5. Either use the system-generated Estimate Number or create your own.
  6. Enter your first Line Item and Item Description, and the Rate and Quantity and the Line Total will populate automatically.
  7. Add relevant Discounts and Taxes.
  8. Add detailed Terms and Conditions, including accepted payments and penalties for late payments, etc.
  9. Review the preview of the estimate the client will see, which has the amount, approval date, and status.
  10. If you are happy with your customized estimate, hit Send and wait for the client to approve or request changes.

How Do I Turn an Estimate into An Invoice Using Invoicer.ai?

Once you create and send the estimate using our Estimate Generator and your client approves it, you can complete the order request. After the service is complete or the client receives the requested goods, you must create and send an invoice immediately if you want to get paid. With the Invoicer.ai Invoice Generator, you can convert the original estimate into an invoice in seconds by following these simple steps:

  1. Head to your Estimates Archives to find the original estimate for that client.
  2. At the bottom of the estimate, select Generate Invoice, which produces an Invoice Number and a list of Line Item details and enables editing, including adding a deposit or a payment.
  3. Hit Send to share the completed invoice with the client.

Voila! When you send the invoice, the status on the estimate changes to Invoiced to keep your records organized. It is also possible to automate the process so that when a business estimate is approved, it automatically creates an invoice and sends it to the client. Because the process is online, you can offer your client online payments and automatic payment reminders, so you get paid faster.

The mobile dashboard enables viewing all estimates and their status, whether they are unsent, sent, approved, invoiced, or archived. It also includes various sorting options to view estimates by issue date, status, client name, email, balance, or payment. 

Keeping It Simple

One of the best ways to automate the time-consuming task of estimate and invoice creation is by using the Invoicer.ai Estimate Generator and Invoice Generator. Our intuitive, affordable, and powerful estimate and invoice solution is perfect for entrepreneurs who want to save time and money, stay organized, and keep clients happy. 

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