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Business documents guide

Quotation vs invoice vs purchase order: what’s the difference?

Three documents that appear in every deal. Knowing how they differ saves time and prevents mistakes.

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Comparison

DocumentIssued byPurposeEffect
QuotationSeller / providerOffer price and terms before agreementNot binding until accepted
Purchase orderBuyerFormal request to buy at an agreed priceBinding once the supplier accepts
InvoiceSeller / providerRequest payment after deliveryFinancial and tax document

The usual document cycle

  1. Seller sends a quotation
  2. Customer agrees and issues a purchase order
  3. Work is done or goods delivered
  4. Tax invoice is issued
  5. Payment is recorded and documents archived

Why link them?

Linking documents removes re-entry and gives traceability from quotation to invoice. In Oqoodi an approved quotation converts into an invoice and contract in one click, with status tracked on your dashboard.

This information is general and educational, not legal or tax advice. Rules change, so check the official authority or a specialist before acting.

Frequently asked questions

Is a quotation binding?

Usually not until the customer accepts, or as set by the quotation’s validity and terms.

Do I need a purchase order if there is an invoice?

The PO comes from the buyer before supply and helps companies control spend and match documents.

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