In short
- A quote is a price agreed before the work. Nothing is owed yet.
- An invoice asks for money: what, how much and by when.
- A credit note takes some or all of an invoice back. You never edit an invoice once it’s sent.
They look alike: your name at the top, a list of things, a number at the bottom. But each tells your customer, and the tax office, something different about where you are in the job.
A quote: “here’s what it would cost”
A quote comes before any work. It tells the customer what you’ll do and what it will cost, so they can say yes. Nothing is owed yet, and it isn’t income. A good quote has a clear description, a price for each part, what’s not included, and an expiry date so old prices don’t come back to haunt you.
An invoice: “please pay this”
An invoice asks for payment for work done or goods delivered. It’s the moment money becomes owed. A useful invoice has a unique number, the date, a due date, what you did, the total, any tax, and how to pay: your bank details, written out.
With tax. If you’re VAT registered in the UK, your invoices are VAT invoices. If you’re VAT registered in Sri Lanka, they’re Tax Invoices, with VAT and SSCL on their own lines.
A credit note: “we’re taking some of that back”
Once an invoice is sent, don’t change it. If you need to reduce what’s owed, because of a mistake, a return or a discount agreed afterwards, issue a credit note for the difference. It has its own number and points to the original invoice, so both sets of books stay in step.
| Quote | Invoice | Credit note | |
|---|---|---|---|
| When | Before the work | After it | After an invoice |
| Is money owed? | No | Yes | Less is owed |
| Counts as income? | No | Yes | Reduces income |
| Date that matters | Expiry date | Due date | Date issued |
- Quote sent to Kirkstall Brewing Co
- £2,400
- Quote accepted, invoice sent
- £2,400
- One label design dropped, credit note
- −£300
- Payment received by bank transfer
- £2,100
- Still owed
- £0
The quote never counted as income. The invoice did, and the credit note took £300 of it back.
Quote to agree, invoice to ask, credit note to correct.
General information, correct as of 14 October 2026. It isn’t tax or legal advice: check with your accountant before a big decision.