These three documents are often mixed up, but each one does a different job at a different point in a sale. Using the right one avoids confusion and disputes.
Estimate (or quote): before the work
An estimate says what you expect the job to cost. It is a proposal, not a request for payment, and it usually has an expiry date after which the price may change.
Send one when a customer wants to know the price before committing, or when the scope is large enough that you want agreement in writing first.
Invoice: when payment is due
An invoice asks for payment for work you have done or goods you have supplied. It has a number, a due date, and the exact amount owed. This is the document that starts the clock on getting paid.
Receipt: after payment
A receipt confirms that money has been received. It closes the loop for your customer, and it is what they keep as proof they have paid.
How they fit together
- The customer asks for a price. You send an estimate.
- They accept it. You do the work.
- You send an invoice, usually built from the accepted estimate.
- They pay. You record the payment and, if they want one, give them a receipt.
In KudiBooks, an accepted estimate converts into an invoice draft with the same customer, items and tax, so nothing is retyped. Only the invoice affects your accounts.
Questions
Is an estimate legally binding?
That depends on how it is worded and on local law. If it matters, say clearly whether the price is fixed or approximate, and ask a lawyer for anything high-value.
Do I need a separate receipt if I send an invoice?
Often a paid invoice is enough, but some customers want a receipt. Check what your customer needs.