Definition
An estimate is a document that gives a client an approximate price for goods or services before work begins. Unlike a quote, the final cost may change if the scope or materials change. Estimates list the expected line items, quantities, and rates so the client can decide whether to proceed.
Estimate in practice
Estimates are standard in trades and project work where the exact effort is unknown until the job is underway, such as plumbing repairs, renovations, or custom software. The estimate sets expectations and creates a paper trail for later changes.
A good estimate states its validity period, lists assumptions, and explains how changes will be handled. When the client accepts, many tools convert the estimate directly into an invoice so line items do not need to be retyped.
Example
A painter estimates $2,400 for a three-bedroom interior based on 1,600 square feet. After discovering wall repairs are needed, the final invoice comes to $2,750 with the extra work itemized.
Frequently Asked Questions
What is the difference between an estimate and a quote?
An estimate is an approximate price that may change. A quote is a fixed price the client can accept, which the seller is expected to honor unless the scope changes. Many businesses use the words interchangeably, so say which you mean.
Is an estimate legally binding?
Generally no, because it is explicitly approximate. However, large unexplained differences between the estimate and the invoice can lead to disputes, so document scope changes as they happen.
How long should an estimate be valid?
Thirty days is common. Shorter windows make sense when material prices move quickly. State the expiry date on the estimate so the client knows when a new price may apply.