Invoice Vs Estimate: Invoice and estimate are two different business documents. Commercially both are widely accepted and used by businesses and freelancers.
An invoice is considered a commercial and legal business document, valid for accounting. At the same time, an estimate is a quote or bid made by the seller or service professional to acquire the deal. It is not considered while maintaining the books of accounts.
Moon Invoice is an online invoicing software helping small businesses, NGOs, and freelancers manage invoices and estimates. Our software for estimates and invoices offers both estimate and invoice creation, but both look different, offering different purposes. Hence, we help you understand the difference between invoice and estimate.
Let’s find out more with examples.
What is an estimate?
An estimate is a project or cost quote that the seller sends. It is a professional document that the seller designs for acquiring the project or deal from the client or buyer. Almost every business owner must send project or cost estimates to help the client understand the time and cost investment in detail.
Types of estimates
- Preliminary estimate
- Detailed estimate
- Bid or quote
- Cost estimate
A banquet owner needs to send the lunch or dinner party estimate to the client, who inquired about the menu and per plate rates. Likewise, a mobile app development company needs to send a project estimate to the client mentioning the total hours and cost per hour for developing the app.
Essential elements of an estimate
A professional project estimate has the following essentials:
- Estimate number
- Total cost estimate
- Customer/client details
- Business logo
- Project details, including quantity and rate.
- Business signature
- Notes, if any
What is an invoice?
An invoice is a legal business document. Invoices are classified into different types depending on the industry and requirements. Commercial invoices, proforma invoices, and recurring invoices are the three different types of invoices.
An invoice is also known as a final invoice or a final bill issued by the seller. An invoice has the complete description or details of the deal, including the amount due for payment. In other words, the invoice is also known as demand for payment as it is a direct way of asking the payment from the client or customer. Invoices, once issued, are due for a receipt from the customer or the client.
Types of invoices
Invoices are classified into various types. The most common types of business invoices are:
- Final or commercial invoice
- Recurring invoice
- Proforma invoice
- Credit note
- Debit note
- Interim invoice
- Expense report
- Timesheet invoice
After delivering the content, a writer issues an invoice to the client describing the number of articles, words per article, rate per word, and the total amount for demanding the payment is called a commercial invoice.
In a proforma invoice, a manufacturer sends an invoice to the buyer to help him to get an easy custom clearance at the port. A proforma invoice is sent before the goods or services are delivered; it assures the deal or commitment between the buyer and the seller.
Online invoicing software: Invoice vs estimate
Invoices and estimates are two different business documents, as discussed above. Here are the basic differences between the two; invoice vs estimate.
|An invoice is issued after the sale is completed.||An estimate is issued before the deal is finalized.|
|Invoice is considered in the books of accounts.||The estimate is not considered in the books of accounts.|
|Invoices are classified into due, paid, or canceled invoices.||Estimates are classified into on-hold estimates and invoiced estimates.|
|Invoice is known as demand for payment.||An estimate is known as a quote or bid.|
Can I convert the estimate into purchase order or invoice?
Moon Invoice, online invoicing software, helps small businesses to convert the estimates into purchase orders and invoices within seconds. Businesses are often looking forward to business accounting software to save both time and effort. Moon Invoice is one of the best online invoicing software to help you work smarter and better.
Here is an image to help you understand how Moon Invoice offers duplicate options for converting an estimate into an invoice, proforma invoice, or purchase order.
Moreover, before we conclude invoice vs estimate, our online invoicing software is available for Windows, Mac, iOS, and Android. Hence, one need not be available on the office premises for sending estimates or invoices. You can manage each of these essential business tasks from anywhere by simply signing up with a free trial or getting a subscription.
Moon Invoice also offers an offline sync feature that helps businesses and freelancers to work in the offline mode. Once the internet connection is resumed, the saved data is synced to the app, saving both time and effort!
Invoice vs estimate: How are estimates an add-on for your Business?
Project or cost estimates are an add-on for your small business or organization. Therefore, an estimate is a clear and transparent way of leading to a new project or deal. It helps maintain strong client relationships as estimates are sent in advance to crack the deal with the client.
Estimates fewer confusion between the seller and the buyer. It is a detailed document with both time and cost detailing to get a clear answer from the buyer or the client. Hence, any confusion in the future can be referred to the project estimate to make it clear or solved.
Moon Invoice helps businesses with different invoicing features, including the commercial invoice, recurring invoices, payment receipts, proforma invoices, estimates, purchase orders, and time logs. It is a complete package of an online invoicing solution to help small businesses with instant invoicing from anywhere.
Invoice vs estimate: How to create a cost estimate?
Cost estimates are pretty essential for businesses. To create a cost estimate online, you can download Moon Invoice on your desktop, laptop, Mac, or mobile. You can either sign up for free with a seven-day free trial or can get a premium subscription.
After you are logged in to the Moon Invoice software, you will see the different categories on the right hand of your screen. Click on ‘Estimates’ and click on the ‘+’ icon for creating a new winning estimate online.
You will be required to fill the different estimate fields for creating a new estimate online using our online invoicing software. Click on save, and send it across to your client via email. You can also download the estimate or print it to send a hard copy of your estimate to the client.
It is a one-minute job with Moon Invoice to create a new cost estimate! We have got the best invoicing solution to help your business manage various accounting operations. You can learn more about invoices and estimates by logging on to our official website.