Quotation, Proforma, Invoice or Receipt: What to Send and When
Quote, proforma, invoice, receipt. Four documents, and it is genuinely easy to mix them up or send the wrong one at the wrong moment. Getting it right matters, because each one does a different job and only one of them is a legal request for payment. Here is the plain-English map: what each document is, the order they go in, and which ones your business actually needs.
Quotation: the price, before any work starts
A quotation is an offer. It tells a potential customer what a job will cost before they commit, so they can weigh it up, compare you against someone else, and say yes or no. It comes first, at the very start of the conversation, and it is usually open to a bit of back and forth on scope or price.
The important thing to understand about a quote is that it is not a demand for money. Nobody pays a quotation. Its whole purpose is to win the work by making the price and what is included clear and professional. A tidy, branded quote is often what tips a hesitant customer into a paying one, which is why it is worth more care than most people give it.
Proforma invoice: agreed details, but still not the final bill
A proforma invoice is the one that trips people up. It looks almost exactly like a real invoice, but it is sent before the transaction is final, once the price has been agreed. Think of it as a formal confirmation of what is about to happen: the items, the quantities, the total, all laid out, so the customer can arrange payment, get internal sign-off, or clear goods through customs.
The catch is that a proforma is not something you actually get paid against or put in your accounts as a sale. It is a placeholder. When the deal goes ahead, it is replaced by a proper invoice, which is the document that officially requests payment and goes on the books. Most small businesses selling locally never need a proforma at all. It earns its place mainly in international trade, or when a customer insists on paying before you deliver.
Invoice: the real, legally binding request for payment
The invoice is the one that counts. It is issued when the work is done or the goods are delivered, and it is a formal, legally recognised request for payment within a stated time. Unlike a quote or a proforma, an invoice is a record of a real sale: it goes in your accounts, it is what a customer pays, and it is what you would point to if payment ever goes wrong.
Because it is the document that actually gets you paid, an invoice needs to leave no room for doubt. A clear invoice number, the issue and due dates, an itemised breakdown, your banking details, and any tax shown as its own line. Send it the moment the job is finished rather than waiting until month end, because the payment clock only starts once it lands with the customer.
Receipt: proof that the money arrived
A receipt is the final step, and it points the other way. Where an invoice asks for money, a receipt confirms that the money has been paid. You issue it after payment lands, and the customer keeps it as proof of a completed transaction, which they may need for their own records, an expense claim, or their tax.
It is easy to think the invoice is enough, but for anyone keeping proper books a receipt closes the loop cleanly. It states the amount paid, the date it was paid, and what it was for, so both sides have an unambiguous record that the deal is settled.
The order they go in, with a simple example
Put together, the flow is straightforward. You send a quotation to win the work. If the customer needs to pay up front or is buying from abroad, you might send a proforma invoice once the price is agreed. When the work is done, you send the invoice to request payment. Once they pay, you send a receipt to confirm it.
So a designer quoting a logo project would send a quote for 800. On acceptance they might take a deposit, invoice for it, and receipt it. When the work is delivered they invoice the balance, and once that clears they send a final receipt. Quote to win it, invoice to bill it, receipt to close it. The proforma only appears when someone needs to pay before delivery.
Which ones does your business actually need?
For most small businesses and freelancers, the honest answer is three: a quotation to win the work, an invoice to get paid, and a receipt to confirm payment. That covers the vast majority of everyday trade, and if you only ever master those three you will be in good shape.
Add a proforma invoice to the mix if you sell internationally, ship goods that need to clear customs, or deal with customers who pay in advance. And if you supply on account over time, a statement of account that summarises everything outstanding is the fourth tool worth knowing. Remit makes them all from one free account: send a quotation to win the work, an invoice to get paid, and a receipt to close it, without switching tools or retyping a thing.
