Often in our routine day-to-day life, we use terms like Estimate and Invoice Interchangeably. However, when seen through the lens of the business, they are two entirely different concepts. So, let’s take a closer look at each one to get to know them a bit better and learn how to create an invoice directly from the estimate using Moon Invoice’s online invoicing software.
The primary distinction is that an estimate (also known as a bid or a quotation) offers services or goods and how much they will cost if a client employs you. Once a client hires you or purchases anything from you, an invoice is a bill for those goods or services. An excellent online invoice maker can help you to make both.
When searching for work to be done or goods to buy, a quotation comes first, then the task is performed, and an invoice is sent. With the technical advancement in the current time, you can convert an estimate into an invoice with a few clicks using an online invoice generator free. How? Keep on reading to know.
Let’s take an example to distinguish between Estimate and Invoice. You own a construction firm, and a prospective client calls you to inquire about the cost of renovation of her apartment. She has not yet formally employed you. What she wants is a ballpark figure for how much you’ll charge her to do that service.
Here, using project estimation software, you can generate an estimate with the specifics of the service she requested and email it. If she accepts the conditions of your service, you may convert that estimate into an invoice, which you will deliver to her once you have cleaned her carpets.
So, whether your business offers services, goods, or a mix of the two, you give estimates for client approval before beginning work on specific tasks or projects. By converting an estimate into an invoice using software for estimates and invoices, you ensure that your billing follows directly from the line items and price that your client authorized, and you simplify both your costing and billing processes.
Guide to convert estimate into invoices and Purchase orders (PO)
It is unnecessary to go through a lengthy and complex process to turn an estimate into an invoice. The software for estimates and invoices simplifies the process. You may also manually copy the information by following the simple steps below.
1. Copy the necessary data and information
You will need certain client information and data to create an invoice from the estimate using an online invoice maker.
How to create the invoice using online invoicing software?
Using an online invoice generator free, it is usually straightforward to convert a current estimate to an invoice.
In Moon Invoice’s online invoicing software, go to the Estimates page, choose the estimate to convert, and then click “Convert.” You may then customize the new invoice to your specifications and send it through email or print it.
Moon Invoice also has tools that allow you to create estimates and invoices by utilizing professional templates quickly.
How to create the invoice manually using the project estimation software?
Copy the project details from your estimate and paste them into an invoice template from the online invoicing software. If you’re using progressive billing, which means you’re only charging for a portion of a project at a time, copy over just the line items and expenses you wish to set for right now.
Some small companies choose to charge a portion of labour or material expenses. Even if you utilize an online invoice maker to turn an estimate into an invoice instantly, you may still need to manually adjust your labour and material costs if your project requires it.
You may even convert an existing estimate into an invoice if you want to save time. You may create your document in whatever format you choose, including Excel, Google Docs, PDF, and Word.
Now, let’s look at how you should make the bill more unique for your customers.
2. Now, customize the invoice as you want
It is now necessary to convert the information from your estimates into a bill. And before you do so, use an online invoice generator for free; here are a few questions which you need to clarify with yourself or your subordinate who handles that particular project.
- Confirm and clarify that the price of any of the products or services has changed? And if Yes, by what amount? (As online invoice maker will take the rate of estimate only)
- Confirm that are you preparing this invoice for the whole job or only a portion of it? If Yes, then verify that how much % of work is completed?
While you are clarifying such other questions, keep in mind that the following information will not change your online invoicing software.
- Your company details
- Your client’s contact information
- Your logo
- Services and expenses from your estimate that you wish to bill for
Also, in the software for estimates and invoices, you must modify the following:
- Set the date to today’s date.
- Convert the estimate to an invoice number.
- Include a due date for the payment (or payments).
- Remove any project completion dates or timeframes.
- Check to make sure that you’ve listed all of the required services and pricing.
- Remove any estimate terms that were no longer applicable, such as the length of time the estimate was valid.
- Delete any remarks on which services and costs were not covered in the estimate made in the first place.
- Double-check the taxes and total amount due one more time.
- Specific terms and conditions along with the aspect of payment
If you need help in completing your invoice, please let us know. Creating a professional invoice using project estimation software is covered in detail in this blog. Here’s an example of a Moon Invoice’s invoice that contains all of the essential elements:
3. Prepare the justification and describe if there are any changes
Any line items or expenses that vary from your estimate must be clarified with the customer before adding them to the invoice. You may prepare an updated estimate using online invoice software for the client’s approval first.
It is the most dangerous thing to send an invoice with unauthorized modifications. It can harm your connection with your customer and reduce your chances of being paid, and a significant threat to customer retention.
Include a note in your invoice mentioning the revised estimate number after the customer has accepted the changes in the project scope using software for estimates and invoices. If necessary, provide a separate line item with extra costs.
After you have double-checked your work, submit the invoice to your customer. Depending on your client’s preferences, you may email it or print and send it by mail. Set a calendar reminder for the payment (or payments) due date if you need to follow up with your customer. An online invoice maker will also have the facility to set reminders for the same.
A complete guide to turning an estimate into purchase order (PO)
You have learned how to convert an estimate into an invoice using an online invoice generator free. Now let’s check out how you can convert an estimate into a purchase order.
Assume your customer approves your estimate. You must purchase the goods or supplies specified in the assessment from one of your suppliers.
For example, a contractor estimates that he will require 50 cement bags & 10 tonnes of sand to finish the task. The customer approves the estimate. The contractor then places a purchase order for the same material at his local hardware shop.
Project estimation software will often allow you to generate a purchase order immediately from an estimate.
It is also possible to do it directly from an Excel or word document, if necessary. According to InTouch Manufacturing Services, a purchase order must contain many essential components listed below.
Follow the below-mentioned procedure to turn an estimate into a purchase order using online invoicing software.
- Click on the button Convert to purchase order.
- Change the information from your customer to your vendor.
- Change the issue date to today’s date.
- Convert the estimated number to a purchase order (PO).
- Include a shipping address for the merchandise or items.
- Delete all line items except the ones you wish to buy.
- Double-check the taxes, subtotals, and total amounts.
- Include payment conditions – when and how you intend to pay for the items.
What is the process for converting an invoice to an estimate?
Perhaps you inadvertently created an invoice instead of an estimate. You’d want to convert the invoice into an estimate.
It is often tough to automate in an online invoice maker. You may need to copy and paste information from your invoice into an estimate template using an online invoice generator free.
Moon Invoice makes it simple to create and distribute professional estimates. To manually convert an invoice to an estimate, do the following steps:
- Change the wording from “invoice” to “estimate.”
- Change the date
- Replace the invoice number with the estimated number.
- Include any timeframes and a tentative completion date.
- If required, revise the services.
- If required, adjust the costs.
- Cover any exclusions like what the project will not include or any vital information.
- Check the sum and the sales tax.
- Include any terms and restrictions which are applicable – like on extra items how charges will be levied.
How do you transform an estimate into a tender?
The answer is evident that an estimate cannot be converted into a tender using online invoicing software. You might, however, turn an estimate into an offer or a bid.
According to ThoughtBubble, the terms “tender” and “bid” are frequently used alternatively in the procurement industry. A tender, by definition, is a document created by a business (the buyer). It describes the project and solicits bids from vendors.
For example, a government agency may issue a tender to three contractors to solicit bids for the renovation of their office. Each contractor submits a proposal outlining how much they will charge to finish the job. The agency then selects one of the three proposals as the winner.
To turn an estimate into a bid, do the following steps:
- Examine the buyer’s tender, called a request for proposals or “RFP”). You may have produced a broad estimate before delving into the buyer’s particular needs. According to Info Entrepreneurs, the tender should specify how expenses should be split down and written.
- If the tender asks for one, provide a comprehensive breakdown. This may contain estimates of reimbursable expenditures and costs at each step of the project and staff/management/administration time and charges (weekly or monthly, for example).
- Reassess the overall cost of your project. If your offer is approved, you will be required to commit to this fee.
- Check that you’ve added sales taxes, specified the currency, and written the entire project cost in both words and numbers.
- Indicate how long your rates remain valid.
- Include a disclaimer that accounts for any unexpected expenses or extra effort and explains why you’re providing it.
So, here is the complete guide about how you can convert an estimate into an invoice using online invoicing software. There are many instances where you need to do this, as creating a separate invoice and separate estimate will eat up your time in clerical work, and you cannot focus on your core skills.
When it comes to providing a quick and unique payment option, Moon Invoice is a formidable rival. Our software for estimates and invoices provides all the valuable features that simplify your business finance and streamline the entire accounting process from the start of the billing cycle. With us, you can also provide multiple payment options to your customers.
It is the most excellent match for everyone, from small company owners to service providers, and it is the best fit for their requirements. It may be used as Healthcare industry accounting software by a hospital or a single practitioner or as a project estimation software or an online invoice maker for construction contractors.
Its simplified tax setup helps you keep track of your tax value. If you want to try the online invoice generator free, contact us at firstname.lastname@example.org or +1-805-491-9393 to arrange a free demo and further discussion with our tech experts.