What is a quotation? How is it different from a VAT invoice?

A quotation helps customers understand what they will receive, how much it will cost and how payment will work before they decide to buy.

When working with business customers, a professional quotation can make a real difference. Instead of discussing prices through scattered messages, you can present your products or services, costs and terms in one clear, easy-to-understand document.

But is a quotation the same as an invoice? What information should it include? And how can businesses use quotations to build trust and make payment more convenient?

1. What is a quotation?

A quotation is a document that presents the products or services a business offers, together with their prices and relevant terms.

It helps the customer understand exactly what the business is proposing before both parties agree to proceed.

Depending on the industry, a quotation may include:

• A list of products or services.
• A description of the scope of work and what is included.
• Quantities, unit prices and totals.
• VAT, where applicable and shown in the quotation.
• Payment terms and due dates.
• The quotation's validity period.
• Exclusions, conditions or potential additional costs.

For example, a web design agency might send a quotation covering website design, development, the number of revision rounds, delivery timelines and payment milestones. The customer knows what they will receive and how much they are expected to pay before accepting the proposal.

A good quotation helps both parties understand the agreement from the start, reducing misunderstandings and unexpected costs.

2. What is the difference between a quotation and a VAT invoice?

A quotation and a VAT invoice serve different purposes. A quotation sets out a commercial proposal, while a VAT invoice is issued under the applicable invoicing, tax and accounting rules.

	Quotation	VAT invoice
Purpose	Presents prices and terms for the customer to review and accept	Records a transaction under applicable legal requirements
When it is used	Usually before a deal is agreed or carried out	According to the legally prescribed invoice timing
Content	Products, services, prices and commercial terms	The information required by invoicing regulations
Use	Supports discussion, agreement and commercial decisions	Supports tax declarations, accounting and related legal purposes
Digital signature	Generally not required just to send a quotation	Must meet the applicable electronic-signature and invoicing requirements
Can they replace each other?	Cannot replace a required VAT invoice	Does not replace the role of a quotation in presenting the original proposal

A quotation is not a VAT invoice and cannot replace an invoice required by law. Even if a customer accepts a quotation, the seller's invoicing obligations do not automatically disappear.

An ordinary quotation generally does not need a digital signature simply to be sent to a customer. However, if it forms part of an agreement or contract, acceptance, signature and enforceability may depend on the parties' arrangements and applicable law.

3. Who should use quotations?

Quotations are especially useful for businesses that need to agree on scope and cost before supplying a product or service.

Common examples include:

• Service businesses: Marketing agencies, consultants, designers, IT companies and software development firms.
• Construction and interior businesses: Quoting materials, labour, project stages and individual work items.
• Product suppliers: Presenting product lists, quantities, unit prices and delivery terms.
• Professional service providers: Accounting, legal, architecture and other business services.
• Project-based businesses: Agreeing on scope, deadlines and payment milestones.

Quotations are also useful for small businesses that do not yet have a formal sales process. A consistent quotation template helps them look more professional without having to rebuild a document for every new customer.

4. Why does a professional quotation build trust?

Customers do not evaluate a business on price alone. They also want to know whether the supplier understands their needs, communicates clearly and can deliver what has been promised.

A well-presented quotation makes it easier to evaluate the proposal and reduces uncertainty before a decision is made.

Clearly explain what the customer will receive

Describe the product, service, scope of work and what is included in the price. Avoid vague descriptions that leave the customer guessing.

Make the costs transparent

List quantities, unit prices, totals and applicable taxes. If some items are excluded, state that clearly instead of letting the customer discover them after work has started.

Set expectations from the beginning

Include delivery timelines, the quotation's validity period, the number of revisions where relevant and other important conditions.

Make the next step clear

Explain how to accept the quotation, when payment is due and how the customer can pay. Customers should not have to send another message just to find out what to do next.

A professional quotation does not need to be elaborate. What matters is that the information is clear, easy to read and consistent with how the business operates.

5. What should a quotation include?

A good quotation should answer three questions: What is the customer buying? How much will it cost? And what terms have both parties agreed on?

Use this checklist as a starting point:

• The supplier's business name and contact information.
• The name of the customer or receiving business.
• A quotation number and issue date.
• A clear list and description of products or services.
• Quantities, unit prices and line totals.
• VAT and the total payable amount, where applicable.
• Payment terms and due dates.
• The quotation's validity period.
• Scope of work, delivery timeline and exclusions, where relevant.
• Instructions for accepting the quotation and payment details.

Not every quotation needs every item. Adapt the content to the product, service and complexity of the transaction.

6. How can a quotation make payment easier?

A quotation does more than present a price. When it includes clear payment terms, it tells the customer how much to pay, when payment is due and what to do next.

For example, a service quotation might state:

• 50% payable upon acceptance.
• The remaining 50% payable upon delivery.
• Payment due within seven days of the payment request, as agreed by both parties.

Clear terms reduce back-and-forth discussions about amounts and deadlines. They also help businesses track expected payments.

Add a QR code for convenient bank transfers

When a quotation includes a bank payment QR code, customers can scan it using their banking app to populate transfer details rather than entering everything manually.

Depending on how the QR code is configured, it may include the receiving account, bank, payment amount and transfer reference.

This reduces effort for the customer and helps avoid manual entry errors. However, a QR code does not guarantee immediate payment. The result still depends on the agreed terms, the customer's approval process and how the business follows up on receivables.

A quotation with a payment QR code is still a quotation. The QR code does not turn it into a VAT invoice.

7. How can you turn a quotation into a VAT invoice without retyping everything?

Once a customer accepts a quotation, the business often needs to reuse the product or service details, quantities, prices and other relevant information when issuing an invoice.

If quotations and invoices are created in separate tools, staff may need to re-enter the information or copy it manually. This takes time and can introduce inconsistencies in quantities, prices or descriptions.

With Invoi.vn, quotations and e-invoices use the same set of information. When it is time to issue an invoice based on an existing quotation, the business can convert it with one click instead of re-entering each line.

This helps businesses:

• Save time after a customer accepts a quotation.
• Reduce errors caused by manual data entry.
• Keep product and service details consistent between quotations and invoices.
• Help business owners and accountants work from the same source of information.

The resulting invoice must still meet the applicable legal requirements for content, timing, digital signatures and processing. Converting a quotation does not change the seller's obligation to issue an invoice at the legally required time.

8. Create professional quotations with Invoi.vn

A good quotation helps customers understand the proposal, feel more confident in the business and know how to proceed.

Invoi.vn helps businesses create professional quotations with customer details, product or service line items, payment terms and a bank transfer QR code. When it is time to issue a VAT invoice, you can convert the quotation with one click instead of manually re-entering the information.

Quotations, invoices and related information are managed on one platform, making it easier for business owners and accountants to work together.

Create clear quotations. Make it easier for customers to accept. Move from quotation to invoice without starting over.

Discover Invoi.vn

Frequently asked questions

Is a quotation the same as a VAT invoice?

No. A quotation presents products or services, prices and commercial terms for a customer to review. A VAT invoice is issued under applicable legal requirements and supports tax, accounting and related purposes.

Does a quotation need a digital signature?

Generally, no digital signature is needed simply to send a quotation to a customer. However, if the quotation forms part of an agreement or contract, signature and acceptance requirements may depend on the parties' arrangements and applicable law.

Should a quotation include VAT?

If VAT is relevant to the transaction, clearly showing the pre-tax price, applicable tax and total payable amount helps the customer understand the full cost. The presentation should reflect the nature of the transaction and the business's tax status.

Can a quotation be used to request payment?

A quotation can state payment terms, the amount due and the payment deadline. Depending on the agreement, the business may also need to send a separate payment request or related document. A quotation does not replace a VAT invoice when one is legally required.

Can I convert a quotation into a VAT invoice?

Yes. Businesses can reuse quotation details when preparing an invoice, provided the invoice meets the applicable requirements for content, timing and processing. Invoi.vn lets you convert a quotation into an e-invoice with one click, reducing manual data entry.

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Disclaimer: This article provides general information and does not replace legal, accounting or tax advice for a specific transaction.