What is the difference between Quotation and Pro forma invoice?

The difference between Quotation and Pro forma invoice can be understood as follow:

Quotation: A quotation is a document that provides a potential customer with an estimate of the cost of goods or services before a purchase.

  • Purpose:
    To offer a price estimate for goods or services, allowing the potential buyer to compare offers and make a decision.

  • Timing:
    Sent early in the sales process, before a purchase order is placed.

Pro forma invoice: A proforma invoice is a preliminary invoice issued after a customer has expressed genuine interest in a purchase and the terms have been agreed upon.

  • Purpose:
    To provide a more detailed and formal estimate of the costs of goods or services after the customer has agreed to the purchase and terms.

  • Timing:
    Sent after a purchase order has been placed, once the prices and terms are agreed upon.