A quote and proforma invoice are used before the issue of a sales invoice, but they have distinct roles to play in the run-up to invoices. What makes them different in a business context?
Quotation: A quote is a an informal document or statement with a loose price estimate on a service or product. It is provided in response to an initial customer enquiry about pricing, so the cost is not final. It is the first step of getting a price when pricing is custom to some degree.
Proforma invoice: As a second step, merchants might offer a ‘pro forma’ invoice. This is a more comprehensive breakdown of costs calculated after the customer has agreed to buy a service or product. Details on the proforma invoice can still be edited, or the whole thing cancelled, as it is not a legally binding document.
In contrast, an invoice is a legally binding document with the final costs of a service or product that is – or will definitely be – delivered. It is also a type of sales contract requiring the customer to pay within a certain time frame.