The difference in one line
- A quote is a firm offer to do defined work for a fixed price. Accept it, and you have a deal at that number.
- An estimate is your best assessment of what the work will likely cost. It is not a fixed price, and both sides know the final figure may differ.
Everything else follows from that. A quote transfers the risk of the job running long onto you. An estimate leaves it with the customer — which is why customers push for quotes, and why you should only give one when the scope is genuinely knowable.
When to send which
| Situation | Send | Why |
|---|---|---|
| Defined scope you have done fifty times | Quote | You can price it accurately, and a fixed price wins the job |
| Work behind a wall, under a floor, or in an old building | Estimate | You cannot see what you are pricing until you open it up |
| Materials with volatile prices and a long lead time | Quote with an expiry, or estimate | A price you honour in six months may cost you money |
| Diagnostic or make-safe work | Estimate, or a fixed callout fee | The scope is literally unknown until you have looked |
| Customer is comparing three trades on price | Quote | An estimate reads as evasive next to two fixed prices |
What belongs on a quote
- Your business name and ABN
- The word Quote, and a quote number
- The date, and an expiry date
- A scope description specific enough to argue from — what is included and what is not
- Itemised line items with quantities and prices
- The total, stated clearly as including or excluding GST
- Payment terms — deposit, progress payments, and days to pay on completion
- How variations will be handled and priced
Item 4 does more work than the rest combined. Most disputes are not about the price, they are about whether something was in it. A line reading "does not include removal of existing tiles" costs you nothing to write and settles the argument before it starts.
Estimates: be genuine about it
An estimate is not a licence to lowball. Under Australian Consumer Law a business must not make misleading representations about price, and an estimate you know is unachievable — pitched low to beat a competitor, with the shortfall recovered in variations later — is exactly that.
Keep estimates defensible:
- Give a range rather than a single number, and say what drives the top of the range
- Label it Estimate on the document, not Quote
- State the assumptions it rests on — access, condition, hours, materials
- Commit to confirming the price before doing anything that pushes past the range
Variations, before the work not after
A variation issued after the fact is a debt collection problem. A variation approved before the work is just the next invoice. The sequence that works:
- Stop when you hit something outside the agreed scope
- Write down what changed and what it adds — in dollars, not "a bit more"
- Send it and get a yes in writing, even if that is a reply to a text message
- Do the work, then bill the original quote and the approved variation as separate lines
Keeping the variation on the same job record as the original quote matters at invoice time: the customer sees the number they agreed to plus the extras they approved, itemised, and there is nothing to dispute.
From quote to invoice
Whatever you send, the invoice should come out of it rather than being typed again from scratch. Re-keying is where line items get dropped, GST toggles get missed and the total stops matching what the customer agreed to. In JASC, an accepted quote converts to an invoice with the client, the line items and the GST treatment carried across — see also what has to be on the tax invoice at the other end.
Source
Payment terms and invoicing practice referenced here follow business.gov.au guidance on payment terms. General information only, not legal advice — check with your adviser for your situation.