Invoicing & Billing

Contractor Invoice vs Estimate: What's the Difference?

An estimate is a quote you provide BEFORE work begins, showing the expected cost of a project. An invoice is a bill you send AFTER work is completed, requesting payment for services rendered. The estimate says "this is what it will cost." The invoice says "this is what you owe."

We Get It

The confusion between invoices and estimates causes real problems. Some contractors send an "invoice" when they mean estimate, confusing clients about whether they're being billed. Others skip the estimate entirely and wonder why clients dispute final bills. Clear documentation at each stage protects everyone.

Understanding the Details

Estimates: Before the Work

An estimate (also called a quote or proposal) is your sales document. It demonstrates what you'll do, what it will cost, and why the client should hire you. Key characteristics:

  • Provided before work begins
  • Shows projected costs (may change based on conditions)
  • Becomes a contract when signed by both parties
  • Typically has an expiration date (30-60 days is common)
  • May include options or alternatives for the client to choose

Invoices: After the Work

An invoice is your billing document. It requests payment for work that has been completed. Key characteristics:

  • Sent after work is done (or at milestones during the project)
  • Shows actual amounts owed based on completed work
  • References the original estimate/contract
  • Includes payment terms and due date
  • May include change orders added during the project

How They Work Together

Think of estimates and invoices as bookends of your project:

  1. Estimate - You propose the work and price
  2. Signed Contract - Client accepts, estimate becomes binding
  3. Work Proceeds - You complete the project (with any change orders)
  4. Invoice - You bill for the completed work per the contract

Practical Steps

Best Practices for Estimates

  • Be detailed—vague estimates lead to disputes
  • Include clear scope and exclusions
  • State payment terms upfront
  • Set an expiration date (prices change)
  • Get it signed before starting any work

Best Practices for Invoices

  • Reference the original estimate/contract number
  • List completed work clearly
  • Include any approved change orders
  • State payment due date prominently
  • Provide multiple payment options
  • Send promptly—don't wait weeks after finishing

Progress Billing

For larger projects, use progress invoices tied to milestones (e.g., 30% at rough-in, 30% at drywall, 40% at completion). This improves cash flow and reduces risk for both parties.

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Frequently Asked Questions

Can I invoice for more than the estimate?
Only if you have signed change orders documenting the additional work. Never surprise a client with an invoice higher than the approved amount. If unforeseen costs arise, get approval through a change order before doing the work.
When should I send the invoice?
Send invoices promptly—ideally within 24-48 hours of completing the work or reaching a milestone. Delayed invoices lead to delayed payments and cash flow problems.
Should I require a deposit?
Yes, especially for larger projects. A deposit (typically 10-50% depending on project size and your market) covers your initial material costs and ensures client commitment. It's standard practice in the construction industry.
What payment terms should I use?
Net 15 or Net 30 (due in 15 or 30 days) is common. For construction, progress payments tied to milestones are preferred. Always state terms clearly on both your estimate and invoice.

Contractor Community Q&A

Real questions from contractors like you, answered by experts and peers.

Featured
A
Amanda S. Handyman • Portland, OR

Is it okay to invoice for more than the estimate if materials cost more than expected?

38 found helpful 2 answers
Construction Coach Expert

Only if your contract allows for it. Many contractors include language like "material costs subject to market conditions" but you need that in writing BEFORE the job starts. Otherwise, you eat the difference or negotiate a change order.

26
T
Tony L.

I build 10% material buffer into my estimates for exactly this reason. Clients never complain if I come in under budget.

12
T
Tom B. Painter • Miami, FL

When should I send the first invoice? After signing or after starting work?

19 found helpful 1 answers
EZcontractPRO Team Official

Best practice is to collect a deposit (25-50%) upon contract signing, before any work begins. This covers your initial material costs and confirms the client is committed.

13

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