Invoice and estimate are two different business documents.
An invoice is considered as a commercial and legal business document, valid for accounting purposes. 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 for small businesses. Our software offers both estimate and invoice creation, but both look different, offering different purposes.
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 estimate
- 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 most common 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.
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
- Interm 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 for helping 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.
Invoice Vs. Estimate
Invoice and estimates are two different business documents, as discussed above. Here are the basic sets of differences between the two.
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 cancelled 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 a 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 for saving both time and effort. Moon Invoice is one of the online accounting software(s) that can 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, our online invoicing software is available for Windows, Mac, iOS, and Android. Hence, one need not be available in the office premises for sending estimates or invoices. You can manage each of these essential business tasks from anywhere in the world by simply signing up with a free trial or getting a subscription.
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 down 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 for making it clear or solved.
Moon Invoice helps businesses with different invoicing features, including the commercial invoice, recurring invoice, payment receipts, proforma invoice, 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 in the world.
How to create a cost estimate?
Cost estimates are quite 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 or app, 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 project or cost estimate online.
You will be required to fill the different estimate fields for creating a new estimate online using Moon Invoice. 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 in managing various accounting operations. You can learn more about invoices and estimates by logging on to our official website.