Quote vs estimate: what’s the difference?

Both tell a customer what a job will cost before it starts – but only one is a firm price.

Customers often use the words interchangeably, but for the business giving the price the difference matters. A quote is a fixed price for a defined job. An estimate is your best guess at the cost, which may change as the work goes on.

The differences at a glance

• Price: a quote is fixed for the work described; an estimate is approximate.
• When to use: a quote when you know the full scope; an estimate when you can’t until the work starts.
• Changes: a quote changes only if the customer changes the job; an estimate may go up or down, ideally after telling the customer.
• Commitment: an accepted quote can form part of a contract in many places; an estimate is usually not a binding price.
• Validity: a quote should state how long the price stands, often 14–30 days; an estimate may too.

When to give a quote

Give a quote when you can price the job precisely: a set of products, a defined design project, a standard installation. Customers like quotes because they know exactly what they will pay, which makes them easier to accept.

When to give an estimate

Give an estimate when there are unknowns: a repair where you can’t see the damage yet, a renovation that depends on what’s behind the walls, or ongoing work billed by the hour. Say clearly that it is an estimate, list your assumptions, and explain how you’ll handle extra costs – for example, “any additional work will be agreed before it starts”.

What both should include

• The word “Quote” or “Estimate” and a reference number
• Your business details and the customer’s details
• A clear description of the work, with labour and materials on separate lines
• Prices, taxes and the total
• The date, and how long the price is valid
• Payment terms, such as a deposit before work starts

From quote or estimate to invoice

When the customer accepts and the work is done, send an invoice using the same line items, adjusted for any agreed changes. Refer to the quote or estimate number so the customer can match them up. If they paid a deposit, show it as amount paid so the balance is clear.

Other names you may see

A quotation is the same as a quote. A bid or tender is a quote submitted in competition with other suppliers. A proforma invoice is similar to a quote but laid out as an invoice, often for international orders.

Create one for free with the quote generator or the estimate generator.