Purpose, timing, what each must contain in the UK and the US, and a side-by-side example
A quote is an offer that tells a client the price before they commit. An invoice is a request for payment after you have delivered, or at a stage you agreed in advance. Both list the same work and often the same amounts, which is why they are easy to mix up. They sit at opposite ends of a job and follow different rules. A quote has no fixed legal format, while a UK VAT invoice must show a list of details set by HMRC. This page covers purpose and timing, what each must contain in the UK and the US, how to turn an accepted quote into an invoice, how to number both, and a side-by-side example.
What is the difference between a quote and an invoice?
The quote asks the client to agree. The invoice asks the client to pay. Almost every other difference between an invoice and a quotation follows from that.
Purpose: a quote is an offer that becomes a contract when the client accepts it. An invoice asks for payment of an amount due under that contract
Timing: a quote goes out before any work starts. An invoice goes out after delivery, or at a deposit or milestone the quote set out
Dates: a quote has a valid-until date for the offer. An invoice has a supply date, an issue date and a payment due date
Amounts: a quote shows what the client can choose, sometimes with optional items. An invoice shows what was actually delivered, including agreed changes
Tax: a quote shows the tax the client should expect. In the UK, a VAT invoice is the evidence a VAT-registered customer needs to reclaim the VAT you charged (HMRC, VAT Notice 700, section 16.2.1)
Records: invoices are the core record. HMRC says you must generally keep business records for VAT purposes for at least 6 years (VAT Notice 700/21, section 2.4), and the IRS lists invoices among the supporting documents that show your gross receipts
When do you send a quote, and when do you send an invoice?
Send the quote when the client asks what the work will cost and you know enough to commit to a price. Send the invoice when payment falls due under what was agreed. That is usually after delivery, but it can be earlier.
Deposit on acceptance: send a deposit invoice once the client has accepted the quote. Do not send the quote itself as a request for money
Stage payments: invoice each milestone the quote named, and refer to the quote number every time
Final invoice: send it when the work is done, listing what was delivered and deducting what has already been invoiced
UK VAT timing: if you are VAT registered, you must normally issue a VAT invoice within 30 days of the tax point (VAT Notice 700, section 16.2.3). For services, the basic tax point is normally the date all the work except invoicing is completed. Issuing a VAT invoice or receiving a payment before that creates an earlier tax point for that amount, and most deposits do this (section 14.2)
Payment terms: in the UK you can set your own terms. Unless you agree a payment date, the customer must pay within 30 days of getting your invoice or the goods or service (gov.uk, Invoicing and taking payment from customers)
What must an invoice contain in the UK?
According to gov.uk, every invoice must include a unique identification number, your company name, address and contact information, the customer's company name and address, a clear description of what you are charging for, the supply date, the invoice date, the amounts charged, the VAT amount if applicable and the total amount owed. Sole traders also show their name and any business name they use, plus an address for legal documents if they trade under a business name. Limited companies show the full company name as it appears on the certificate of incorporation. If you and your customer are both VAT registered, you must use a VAT invoice, and HMRC lists what it must show (VAT Notice 700, section 16.3.1).
A sequential number based on one or more series which uniquely identifies the document
The time of supply (tax point), and the date of issue if that is different
Your name, address and VAT registration number
The customer's name and address
A description sufficient to identify the goods or services
For each description, the quantity or extent, the VAT rate and the amount excluding VAT
The total amount payable excluding VAT, the rate of any cash discount offered, and the total VAT in sterling
The unit price, such as an hourly rate, where the supply can be counted
Simplified invoices: for a supply of £250 or less including VAT, a shorter invoice is allowed (VAT Notice 700/21, sections 4.4 and 4.5)
What does a US invoice usually contain?
The US has no national invoice format. The IRS says you may choose any recordkeeping system suited to your business that clearly shows your income and expenses, and it lists invoices among the supporting documents to keep. In practice, a US invoice that gets paid without questions contains the following.
Your business name, address and contact details, and the client's name and billing address
An invoice number and the invoice date
A reference to the quote, contract or purchase order the invoice is based on
A description of the goods or services, with quantities, rates and line totals
Sales tax as a separate line where it applies. The SBA notes that sales tax can vary significantly from place to place, so check the rules where you make the sale
The total due, the due date and the payment methods you accept
For freelancers: a new client may ask for Form W-9 before paying. The IRS explains that the form gives your correct Taxpayer Identification Number to the person who must file an information return reporting income paid to you
Can a quote be used as an invoice?
No. A quote is an offer, and it lacks what makes an invoice an invoice: a number in your invoice series, a supply date, a payment due date and, in the UK, the tax point a VAT-registered customer needs to reclaim VAT. A client's accounts team will usually ask for a proper invoice before paying. HMRC also warns about the closest alternative. A pro-forma invoice, often used to offer goods or services that will only be supplied once payment is received, cannot be used as evidence to reclaim input tax even if it shows all the details of a VAT invoice, and it should be clearly marked this is not a VAT invoice (VAT Notice 700, section 17.3). What you can do is reuse the quote. Copy the accepted line items into a new invoice so the numbers match exactly.
How do you turn an accepted quote into an invoice?
Start from the version the client actually accepted, not your latest draft. If you send quotes with Proposal Expert, the pricing table already calculates tax per line and the totals, the client ticks any optional items, and the electronic signature carries a trusted timestamp and a sealed audit trail, so the accepted version is easy to identify. Then work through these steps.
Check acceptance: a signature, a purchase order or a written yes that refers to the quote number
Copy the accepted lines at the quoted prices, including the optional items the client chose
Add agreed changes as separate lines, with the date and the way they were agreed
Give the invoice its own number from your invoice series and add the quote reference, for example invoice INV-2026-031 for quote Q-2026-014
Add the supply date, the invoice date and the due date
Deduct deposits already invoiced and name their invoice numbers, so the client sees one clean balance
Recalculate tax on the final amounts, and in the UK show the VAT rate for each line
Add payment details and send it promptly, and within 30 days of the tax point if it is a UK VAT invoice
How should you number quotes and invoices?
Use two separate series. HMRC requires a VAT invoice to carry a sequential number based on one or more series which uniquely identifies the document (VAT Notice 700, section 16.3.1). Quotes have no such rule, but many are never accepted, so mixing them into the invoice series would leave gaps and confuse your records. A simple pattern works for most small businesses.
Quotes: Q-2026-001, Q-2026-002 and so on. A revised quote keeps its number with a version, such as Q-2026-014 v2
Invoices: INV-2026-001 onwards, in order of issue, never reused
Deposits and stage payments: ordinary invoices in the same invoice series, each referring to the quote
Corrections: do not edit an issued invoice. Issue a credit note, which HMRC says must reflect a genuine mistake, an overcharge or an agreed reduction and must show its own identifying number and date (VAT Notice 700, section 18.2.3). Then issue a new invoice if needed
Cross-references: put the quote number on every invoice, and the purchase order number if the client uses one
What do a quote and an invoice look like side by side?
Here is one fictional job, a website built for a UK client by a VAT-registered business called Northfield Studio, first as the quote and then as the invoices. The standard VAT rate of 20 percent applies (gov.uk, VAT rates). A US version would use the same structure in dollars, with sales tax added only where it applies to the service.
Quote Q-2026-014, dated 3 March 2026, valid until 2 April 2026
Quote lines: website design and build £3,200.00, content migration of 20 pages at £30 each £600.00, optional SEO set-up £450.00 (ticked by the client)
Quote totals: £4,250.00 excluding VAT, VAT at 20 percent £850.00, total £5,100.00. Terms: 30 percent deposit on acceptance, balance on launch, each invoice payable within 30 days
Deposit invoice INV-2026-022, dated 6 March 2026, reference Q-2026-014: 30 percent of the quote, £1,275.00 plus VAT £255.00, total £1,530.00
Final invoice INV-2026-031, dated 11 April 2026, the launch date and tax point, reference Q-2026-014
Invoice lines: the three quoted lines as above, plus an agreed change, content migration of 2 extra pages at £30 each £60.00, agreed by email on 25 March 2026
Invoice totals: £4,310.00 excluding VAT, VAT at 20 percent £862.00, total £5,172.00
Less deposit invoice INV-2026-022: £1,275.00 plus VAT £255.00, total £1,530.00
Balance due by 11 May 2026: £3,035.00 plus VAT £607.00, total £3,642.00
Frequently asked questions
Is a quote a bill?
No. A quote tells the client what the work will cost if they accept. A bill, or invoice, tells them what they owe and by when. Nothing is payable on a quote until the client accepts it and the agreed payment moment arrives, and at that point you send an invoice.
Can an invoice be used as an estimate?
No. An invoice states an amount due, so sending one before the client has agreed anything is confusing at best. In the UK it can also have tax consequences, because issuing a VAT invoice before the basic tax point creates a tax point for the amount invoiced (VAT Notice 700, section 14.2.2). If a client needs a figure first, send an estimate or a quote.
What is the difference between a pro-forma invoice and a quote?
Both come before the supply. A quote is an offer with a validity date that the client accepts. A pro-forma looks like an invoice and is often used when goods or services will only be supplied once payment is received, but HMRC says it cannot be used to reclaim VAT and should be marked this is not a VAT invoice (VAT Notice 700, section 17.3). After you receive payment or deliver, issue a proper invoice.
Does a quote need a number?
No law requires one, but it helps. A quote number lets the client accept a specific version, lets you match the invoice to it, and lets you find the file later. Keep quote numbers in their own series so your invoice series stays sequential, as HMRC requires for VAT invoices.
Should prices on a quote include VAT or sales tax?
For UK consumers, yes. The Consumer Contracts Regulations 2013 require the total price inclusive of taxes before the contract is made. For UK business clients, quote prices excluding VAT and show the VAT separately, the same way the invoice will. In the US, show sales tax as a separate line where it applies, since the SBA notes that it can vary significantly from place to place.