Estimate vs. invoice: what's the difference, and when do you send each?

An estimate tells the customer what the job should cost before you start, so they can say yes. An invoice asks to be paid for work you've done, with a due date and how to pay. Build the invoice from the approved estimate: same lines, approved changes on their own lines, any deposit subtracted, and the balance due as the clearest number.

This is general guidance, not legal or tax advice. Rules on estimates, invoices and contracts vary by state, so check yours.

The short answer

An estimate is sent before the work, to get a yes; an invoice is sent after the work, to get paid. The estimate is the price you offer; the invoice is the bill.

A receipt comes last: it confirms you were paid. See the payment receipt template.

What goes on an estimate

• Scope and line items. What you'll do, in plain words, one line per task or material.
• Exclusions. What's not included, such as permits, hauling, or repairs you can't see yet.
• Valid-until date. When the price expires.
• Deposit terms. How much is due before you start, if anything, and when.
• How the customer approves. A signature, or a written yes by text or email, and the date.

For the full walk-through, see how to write a contractor estimate, or start from the free estimate template. Not sure whether to call it an estimate or a quote? See estimate vs. quote vs. bid.

What goes on an invoice

• The word "Invoice" and its own number. The next number in your sequence, not the estimate's number.
• The estimate # it comes from. So the customer can match the two.
• The same lines. In the same order and wording as the estimate they approved.
• Approved changes. Each on its own line, with when and how the customer OK'd it.
• Less deposit paid. Any deposit, subtracted, with the date it was paid.
• Balance due. The biggest, clearest number on the page.
• A due date. "Due on receipt" or an actual date. See invoice payment terms.
• How to pay. Every way you accept payment, with the easiest one first.

More on each part in how to write an invoice that gets paid on time.

Can you send the estimate as the invoice?

You can, but a separate invoice is clearer: it has its own number, a due date, and the balance after any deposit.

Why a separate invoice is clearer

An estimate carries wording that belongs before the job, like a valid-until date and a place to approve. An invoice replaces that with what the customer needs now: what's owed, by when, and how to pay. Its own number also keeps your records in order.

Turning an approved estimate into an invoice

Start from the approved estimate and change only what the job changed.

1. Copy the estimate lines in the same order.
2. Add each approved change as its own line, with when and how the customer OK'd it. See change orders.
3. Reference the estimate #, for example "From estimate #[number]."
4. Subtract any deposit as "Less deposit paid." See the deposit invoice template.
5. Give it the next invoice #, a due date, and how to pay. You can fill it in on the free invoice template.
6. Send it the day you finish.

Billed by the hour instead?

If the job was billed for time and materials rather than a set price, use the time and materials invoice template.

When the invoice doesn't match the estimate

Changes the customer approved go on their own lines, never as a quietly changed total, so the customer can see each one next to the estimate they said yes to. If the job turned out different because of something you couldn't see when you priced it, the hidden-conditions wording in estimate vs. quote vs. bid shows how to set that up on the estimate. Some places limit how far a final bill can go past a written estimate; check your state's rules.

Where deposits, stage payments and receipts fit

• Deposit. After the estimate is approved, bill the upfront part with the deposit invoice template, then subtract it on the final invoice. Deciding whether to ask for one? See how to ask for a deposit.
• Stage payments. On a longer job, bill each stage as it's done. See progress invoicing.
• Receipts. Confirm each payment with the payment receipt template.

Frequently asked questions

Is an estimate the same as an invoice?

No. An estimate gives the price before the work so the customer can say yes; an invoice asks to be paid after the work, with a due date and how to pay.

Can I use an estimate as an invoice?

You can, but a separate invoice is clearer. It has its own number, a due date, and the balance after any deposit, and it doesn't carry approval wording that belongs before the job.

What is an "estimate invoice"?

It isn't a separate document. The phrase means an invoice built from an approved estimate: the same lines, the estimate # it came from, any approved changes, and the balance due.

What's the difference between a quote and an invoice?

A quote is a fixed price offered before the work; an invoice asks to be paid after it. For how a quote differs from an estimate or a bid, see estimate vs. quote vs. bid.

Can the invoice be higher than the estimate?

Only for what the customer agreed to: approved changes, each on its own line, or extra work the estimate said could change the price and the customer OK'd before you did it. Some places limit how far a final bill can go past a written estimate, so check your state's rules.

Do I still send an invoice if the customer paid a deposit?

Yes. Show the job total, "Less deposit paid," and the balance due, and send a receipt for each payment.

Templates

Start from the free estimate template and the free invoice template, or pick your trade from estimate templates by trade and invoice templates by trade.