Last updated November 6, 2026
Rules and figures from other sources checked on November 6, 2026. They change, so confirm with the source before you rely on them.
General information, not tax or legal advice. The rules depend on your country and your situation, so check anything with a tax or legal consequence with your accountant.
A quote offers a price before the work. An invoice asks for payment once the work is agreed or done, and is usually the tax document. A receipt confirms the money has arrived. They mark different moments in one sale, and only the invoice normally carries the VAT details your customer needs to reclaim tax.
What is the difference between a quote, an invoice and a receipt?
The difference between a quote, an invoice and a receipt is which question each one answers and what happens because of it.
| Quote | Invoice | Receipt | |
|---|---|---|---|
| Question it answers | What will it cost? | What do you owe, and by when? | Have you paid? |
| When it's issued | Before the work | At the agreed billing moment | When the money arrives |
| Who relies on it | The customer, deciding | The customer's accounts team and the tax authority | The customer's records |
| Legal effect | An offer, which acceptance generally turns into a contract | Sets out what is owed | Evidence of payment |
| Number | From its own sequence | Sequential and unique, for VAT | Not required, unless it doubles as a simplified invoice |
| VAT effect | None | Usually records or triggers the VAT | None by itself |
| Can the customer reclaim VAT on it? | No | Yes, if valid | Only if it meets the simplified invoice rules |
| If it's wrong | Reissue it before acceptance | Correct it with a new document | Issue a new one |
Most of the confusion comes from people treating these as versions of one document. They aren't. A retyped quote with "INVOICE" at the top is usually missing half of what an invoice needs. Converting a quote to an invoice goes through what has to change.
Is a quote legally binding?
A quote is generally binding once the customer accepts it, because an accepted offer usually forms a contract, while an estimate generally isn't, because it is only an informed guess. National contract law decides the details, and in some countries an offer with a stated validity date can't be withdrawn before that date.
So name the document for what it is. If the price might move, write "Estimate" at the top and say what could change it. If you're committing, write "Quote", state the scope and give a valid-until date, so that an old price can't be accepted a year later.
Is an invoice the same as a receipt?
An invoice isn't the same as a receipt, because an invoice asks for money that hasn't been paid and a receipt records money that has. An invoice marked paid, with the date and amount, can do both jobs, and many small businesses use it that way.
The overlap you need to know about is the simplified invoice. A till receipt can serve as a VAT document for a small sale if it shows the required details:
- In the EU, countries must allow a simplified invoice up to €100, with exceptions for some cross-border sales. It needs at least the issue date, your identification, the type of goods or services, and the VAT amount or the information to work it out (Articles 220a and 226b of the VAT Directive).
- In the UK, a simplified invoice is allowed where the supply is £250 or less and the customer agrees. It shows your name, address and VAT number, the tax point, a description, and the total and VAT rate (HMRC's VAT guide, paragraph 16.6.1).
Above those limits, a business customer needs a full invoice to support a VAT claim. Some countries also require a receipt for retail or cash sales, sometimes from a registered till, so check yours if you sell over a counter.
Where do estimates, pro formas and purchase orders fit?
Estimates, pro formas and purchase orders sit around the three main documents, and two of them regularly get mistaken for invoices.
| Document | What it is | Mistake to avoid |
|---|---|---|
| Estimate | A rough price, open to change | Calling it a quote and being held to it |
| Pro forma invoice | An invoice-shaped offer, often to get paid before supply | Treating it as a tax document. HMRC says it can't support a VAT claim and should be marked "this is not a VAT invoice" (paragraph 17.3), and a proper VAT invoice must follow |
| Purchase order | The customer's own document committing to buy | Leaving its number off your invoice |
| Delivery note | Evidence that goods arrived | Sending it in place of an invoice |
| Credit note | Reduces or cancels an issued invoice | Editing the invoice instead |
| Statement of account | Lists what's open and paid for one customer | Expecting it to replace the invoices |
One job, every document: a worked example
Here's an invented example. An electrician rewires a shop for €2,000 plus 20% VAT, with 30% due on acceptance.
| Date | Document | Net | VAT | Total | Customer owes afterwards |
|---|---|---|---|---|---|
| 3 March | Quote QUO-2026-0031 | €2,000 | €400 | €2,400 | €0: nothing yet |
| 6 March | Invoice INV-2026-0107, deposit 30% | €600 | €120 | €720 | €720 |
| 7 March | Receipt for the deposit | €720 | €0 | ||
| 24 March | Invoice INV-2026-0119, balance 70% | €1,400 | €280 | €1,680 | €1,680 |
| 30 March | Receipt for the balance | €1,680 | €0 |
The two invoices add up to the quote: €600 and €1,400 net, €120 and €280 VAT, €720 and €1,680 in total. The quote itself never entered the books. It recorded what was agreed, and that's its whole job. How VAT applies to the deposit is covered in deposit and final payment invoices.
If a customer asks for a receipt, this wording is enough:
Received with thanks: €720.00 on 7 March 2026 by bank transfer, in payment of invoice INV-2026-0107 from Bright Spark Electrical Ltd. Balance remaining on this invoice: €0.00.
Mix-ups that cause real problems
- Reclaiming VAT on a quote or pro forma. The customer has no valid document, and the claim can fail if it's checked.
- Sharing one number sequence between quotes and invoices. Declined quotes then leave holes in your invoice numbering, and you'd have to explain each one.
- Issuing an invoice for a job that hasn't been accepted. It may create a VAT liability for a sale that never happens, and cancelling it takes a further document.
- Treating a card slip as a receipt for VAT. A slip that shows only the amount paid doesn't name the VAT, so it won't support a claim.
Quotes, invoices and receipts in ERPFlow
Quotes and invoices are separate documents in ERPFlow, each with its own numbering, such as QUO-2026-0031 and INV-2026-0107. Convert to invoice copies a quote into a new draft and links the two. You mark a quote accepted or declined by hand, because customers can't accept or sign one online.
ERPFlow has no receipt document and no pro forma. Once you've recorded a payment, two things stand in for a receipt. Emailing a paid invoice again sends it with a line saying it has been paid in full, and a partially paid invoice's PDF prints Paid and Amount due. A fully paid invoice's PDF doesn't print a paid stamp, so if a customer needs a formal receipt, write one using the wording above.
Receipts you receive from suppliers belong on an expense, where you can attach the file or, on a phone, photograph it. ERPFlow doesn't read the figures from the image, so you type them in.