Proforma Invoice vs Invoice vs Quotation: What's the Difference

A quotation, a proforma invoice and a regular invoice can look nearly identical at a glance — same layout, same line items, same totals — but they serve three distinct stages of a transaction, and using the wrong one at the wrong stage causes real confusion for both sides.

Quotation: before the deal is confirmed

A quotation is an estimate you send before any commitment is made — it tells a prospective client what a job or product would cost if they go ahead. It's not a demand for payment and typically isn't recorded in your accounting as a receivable, since there's no confirmed order behind it yet. Quotations often carry a validity period ("valid for 15 days") since prices can change.

Proforma invoice: after agreement, before the actual sale

A proforma invoice is sent once the client has agreed to proceed but before the goods or services are delivered and before a real invoice is raised — it confirms exactly what's being sold, at what price, so the client can arrange payment, an import permit, or internal purchase approval. It looks like a real invoice but explicitly isn't one: it has no invoice number in your official sequence and creates no tax or accounting liability.

Invoice: the real, legally binding demand

A regular (tax) invoice is issued after goods are delivered or services rendered — it's a legal demand for payment, carries a sequential invoice number, and is what actually gets recorded in your books and used for GST/tax purposes. This is the only one of the three that creates an enforceable payment obligation and reportable tax event.

Side by side

• Quotation — before commitment, an estimate, no payment obligation, no formal numbering required
• Proforma invoice — after agreement, before delivery, informational only, explicitly not a demand for payment
• Invoice — after delivery, a legal and tax document, sequential invoice number, creates a payment obligation