What is an estimate?
Definition of an estimate
An estimate is a document that you give to a customer, showing how much you expect to charge them for goods or services you're going to supply.
If you give an estimate to a customer, you're still allowed to charge them more (or less!) on the invoice when you actually come to supply the goods or services.
It's the end of the tax return as we know it! Find out about HMRC’s Making Tax Digital plan and how it will affect you with our free guide.
On the other hand, if you give a customer a quote or quotation, you have to supply the goods or services at the same price as you quoted.
How to write an estimate
Your estimate should include:
- Your business contact details
- The details of the person or business receiving the estimate
- The date of the estimate
- The goods or services that you are offering to supply
- An estimated price for each good or service
- The total of all estimated amounts
Example of an estimate
This estimate example was created using FreeAgent.
Sending estimates with software
FreeAgent enables you to create, customise and send your estimates to clients by email and then track whether they are approved or rejected. You can also build your own workflow of proposals, quotes and estimates. When the work's done, you can quickly convert your estimate into an invoice.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.