Invoices, however, are presented to a client when work has been completed on a job and payment is due. Businesses provide clients with estimates before any work has begun and before any money is due for payment. Whereas an invoice requests payment for products sold or services rendered by a business, an estimate does not seek payment but rather offers a quote for future services and outlines the amount those services would cost the client.Īn estimate is a proposal detailing what future services would cost the customer. This example illustrates how the terms invoice and bill are used differently in accounting:Ī business sends an invoice to a customer → The customer receives it as a bill → The customer pays the amount owing → The business issues a receipt as proof of the payment What’s the Difference Between an Invoice and an Estimate?Īn invoice and an estimate look similar to one another and contain much of the same information, but they serve very different purposes.