What’s an Estimate? Differences from Invoices
An estimate is a calculated approximation of the cost of goods or services that a business plans to provide to a customer.
It is a preliminary estimate that can be used as a guide for budgeting and decision making. This estimate can be used to indicate the expected costs and the scope of work required for a project before the actual work begins.
An estimate can be considered as a non-binding agreement between the business and the customer. It is a way for the business to communicate their understanding of the customer's needs and the costs associated with meeting those needs. It is also a way for the customer to understand the costs associated with the project before committing to it.
There are many factors that go into creating an estimate. These factors can include the materials and labor required, the complexity of the project, and the timeline for completion. Businesses will often use historical data and industry standards to create their estimates.
It's important to note that an estimate is not a final cost and the actual cost may vary. The estimate should include a disclaimer that the final cost may be higher or lower than the estimate provided. This is important for both the business and the customer to be aware of.
In conclusion, an estimate is a calculated approximation of the cost of goods or services that a business plans to provide to a customer. It serves as a guide for budgeting and decision making and a non-binding agreement between the business and the customer. It's important to note that an estimate is not a final cost and the actual cost may vary. Businesses will often use historical data and industry standards to create their estimates, and should include a disclaimer that the final cost may be higher or lower than the estimate provided.
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