Estimate vs invoice at a glance
| Estimate | Invoice | |
|---|---|---|
| When | Before the work | After the work, or at a milestone |
| Purpose | Win the job and agree the scope and price | Get paid |
| Customer must pay it? | No, until they accept it | Yes, by the due date |
| Price | Expected; may change with scope (see change orders) | Final, matching the accepted estimate plus approved changes |
| Key extras | Valid-until date, scope, deposit request | Invoice number, due date, deposit credited, balance due, how to pay |
Estimate, quote and bid are not the same either; see how to write a contractor estimate for that comparison.
How an accepted estimate becomes an invoice
- Start from the accepted estimate. Keep the same lines, quantities and prices, so the customer recognizes what they agreed to.
- Apply signed changes. Add or remove lines only where there is a signed change order.
- Credit what was paid. Subtract the deposit and any earlier milestone payments.
- Add the invoice details. Invoice number, invoice date, due date, payment methods and late fee wording. The full list is in what to put on a contractor invoice.
- Send it promptly. The day the work is done or the milestone is reached.
A worked example
A fence repair, estimated at $678 plus 8% tax on materials, with a 30% deposit taken at booking. After the job a change order added one extra post, $60.
| Estimate | Invoice | |
|---|---|---|
| Labor | $390.00 | $390.00 |
| Materials | $228.00 | $228.00 |
| Disposal | $60.00 | $60.00 |
| Change order: extra post | – | $60.00 |
| Subtotal | $678.00 | $738.00 |
| Tax: 8% × $228.00 materials | $18.24 | $18.24 |
| Total | $696.24 | $756.24 |
| Deposit received (30% of $696.24) | – | −$208.87 |
| Balance due | – | $547.37 |
Check: 738.00 + 18.24 = 756.24; 756.24 − 208.87 = 547.37. The extra post is treated here as labor and disposal (not taxed materials); tax treatment varies by state. Figures are illustrative.
Common mistakes
- Sending an invoice with no estimate behind it, so the customer disputes the price.
- Reusing the estimate number on the invoice.
- Forgetting to credit the deposit.
- Adding work without a signed change order, then billing for it.
- Leaving the due date or payment method off the invoice.
Frequently asked questions
What is the difference between an estimate and an invoice?
An estimate is a proposed price for work you have not done yet, and the customer is not obliged to pay it. An invoice is a request for payment for work done or a milestone reached. The estimate comes first; the invoice follows the accepted estimate.
Can I turn an estimate into an invoice?
Yes. Copy the line items from the accepted estimate, add or remove lines that match signed change orders, credit any deposit already paid, add an invoice number and due date, and send it. The free Estimate & Invoice Maker on this site is built for this.
Is an estimate legally binding?
It depends on the wording and your state. A non-binding estimate can usually change if the real cost differs; a quote or fixed bid generally commits you to the price. Say clearly on the document which one it is, and check your state's rules. This is not legal advice.
Do I need a different number for an invoice?
Yes. Give every invoice its own unique number in sequence, separate from the estimate number, so that you and the customer can find each one later.
One tool for both
The free Estimate & Invoice Maker makes the estimate, then turns it into an invoice with tax, deposit and balance due worked out. No sign-up; your data stays in your browser. Prefer a template? Try the free estimate template or the free invoice template.
Illustrative figures for planning only. This is not accounting, tax or legal advice.