You will probably receive an invoice slightly different from the estimate you already have now that you have chosen Kilgore Companies as your preferred contractors for your upcoming project. However, if you do not know the difference between the two documents, you will encounter challenges in understanding the cash flow or purchase processes. From time to time, projects may begin with an estimate before receiving an invoice.
What is An Estimate?
Construction companies use an estimate to outline and project’s scale and cost. This document allows them to recommend estimates as the first step in the purchase process when a client requires an approximate assessment of the product or service for consideration. Most jobs in construction require an estimate that helps the company anticipate the volume, type of work, and material needed to satisfy the client’s needs. Companies use an estimate template to capture the approximate cost of labor and material for the projects and transmit it to clients for consideration.
What is An Invoice
Jobs in construction require sending an invoice to clients as an official confirmation of a transaction. Generally, a bill is sent by a business to the customer after orders have been completed. An invoice includes information on the sale. Such details include what service was offered or the good sold, its price, and where or when it was delivered.
Invoice Vs. Estimate
Although an estimate and invoice are essential documents, they serve different purposes. They vary in the following ways:
- Companies send an estimate upon initial inspection before they deliver services or begin work and an invoice as a confirmation of what is already completed
- An estimate is often an informational document, while an invoice is a confirmation of goods and services
- An estimate is optional, especially in service-based companies, but an invoice is a mandatory document
- Accounting departments consider an invoice a legally binding document included in the accounting books, unlike an estimate.