When Is It Best to Use Estimates: Advice for Freelancers

An invoice is a commercial document sent to a customer that itemises and records a sale transaction. When a consumer receives an invoice, it serves as an official request for these services.

If you want to build a relationship on the back of a good estimate, you must invest the time upfront. Estimates should provide a high-level overview of the plan and schedule, but exclude finer details. It’s impossible to create an estimate that’s 100% accurate, but we should at least try to come close.

When is it best to use estimates

When to use an invoice?

When in doubt, use an invoice. It’s simple and easy to understand. Any deviations from the norm, or items that were unable to be mentioned, can be changed in the description at the bottom. Within 30 days of completing the task, send an invoice to the customer.

However, there are additional factors to consider when deciding whether to issue an invoice:

  1. If you have a large or expensive project, you might seek advance payment. This means you would issue an invoice before the project begins.
  2. When engaging in a long-term project, you may choose to submit an invoice when certain phases are completed. You must, however, reach an agreement with the customer and determine a chargeable price for each project stage.
  3. Simply put, you finish the project and then charge the customer for your work. Most of the time, it works since it is ordinary practice. Now and then, a client will fail to pay the invoice.
  4. If you provide a regular service to your client, you will have a set billing method, such as every month or annually, depending on your agreement.

Benefits of using an invoice

  • Encourages payment
  • Helps the customer see what they are getting for their money
  • Enables healthy cashflow practices
  • Keeps record of payments and sales

When to use estimates?

  • Estimates can be useful in a variety of situations, including:
  • Keeping track of quotations
  • Representing Sales orders
  • Tracking Deposits / Prepayments / Retainers
  • Receiving permission from your customer to proceed with an order
  • Estimating the cost of a job or project
  • Guarantees that when the project begins, both parties are on the same page

Benefits of an estimate?

  • Starts good relationships and practices
  • Allows you to document a project’s phases, components, and deliverables from the start. This reduces the likelihood of underselling yourself.
  • Helps determine the viability of a project
  • Lets you know exactly how much money to allocate to each stage
  • Gives stakeholders a rough idea of how long the project will take

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