Quotation vs Invoice: Key Differences Every Business Should Know

While both quotations and invoices are essential commercial documents, they serve opposite ends of the sales cycle: ### Quick Comparison Table | Attribute | Quotation | Invoice | | :--- | :--- | :--- | | **Stage** | Pre-sale negotiation | Post-sale / post-delivery | | **Purpose** | Propose pricing, scope, and terms | Request payment for rendered goods/services | | **Accounting Entry** | Non-accounting (memorandum only) | Accounts Receivable / Revenue recorded | | **Legal Effect** | Becomes binding once signed | Formal proof of debt and tax liability | | **Tax Liability** | Does not trigger tax remittance | Triggers GST/VAT reporting obligation | ### When to Issue a Quotation A quotation is issued during the discovery or proposal phase. It allows the customer to review rates, negotiate revisions, and budget the expense before committing capital. ### When to Issue an Invoice An invoice is generated once the quotation has been accepted and either the upfront deposit is due or the work has been completed.