Plain-English definitions of the client-management and billing terms contractors and service businesses run into every day. Each entry explains what the term means and how it shows up in real work.
An estimate is an approximate, non-binding figure for what a job is likely to cost. It gives the client a ballpark based on the information available before work begins, and the final price can move up or down as the scope becomes clearer. Estimates are common when the exact materials, hours, or site conditions are not yet known. See our guide on writing estimates that win more jobs.
A quote is a fixed price for a defined scope of work, offered to the client for acceptance. Unlike an estimate, a quote is a firm commitment, so once the client accepts it the price generally does not change unless the work itself changes. Quotes are best suited to jobs where the scope is well understood up front.
An invoice is a request for payment that itemizes the work performed or goods delivered, along with the amount owed and the due date. It serves as the official record of a sale and is the document a client pays against. A clear invoice usually lists line items, taxes, any deposit already paid, and the remaining balance. Read more on invoicing best practices to get paid faster.
A change order is a written amendment to an existing agreement that documents a change in scope, price, or timeline after work has started. It protects both parties by recording exactly what was added or removed and what it costs, so there are no surprises at the final invoice. Change orders are common in construction and renovation work, where conditions often shift mid-project.
Progress billing is the practice of invoicing a large job in stages as it advances, rather than all at once at the end. The plan that maps those stages to payment amounts is called a draw schedule, and each scheduled payment is a "draw." This keeps cash flowing during long projects and ties payments to verifiable progress. Learn more about deposits and progress billing on bigger jobs.
A deposit is an upfront payment a client makes before work begins, typically a percentage of the total job. It secures the client's commitment and helps the contractor cover early costs such as materials and scheduling. The deposit is later credited against the final invoice, reducing the remaining balance owed.
Retainage (also called retention) is a portion of each payment that the client withholds until the project is finished and approved. It is common on construction contracts and acts as a safeguard, giving the client leverage to ensure the work is completed correctly. The withheld amount, often 5 to 10 percent, is released once final inspection or punch-list items are done.
An e-signature (electronic signature) is a legally recognized way to sign a document online instead of on paper. A client can approve a quote, contract, or change order by typing or drawing their signature, and the system records when and by whom it was signed. E-signatures speed up approvals and create a clear audit trail without printing or scanning.
A CRM is software that stores your client records, contact history, jobs, and communications in one organized place. It helps a business track every lead and customer from first inquiry through repeat work, so nothing falls through the cracks. For service businesses, a good CRM ties contacts directly to their quotes, invoices, and payment history. See how Tabsy compares to other tools on our comparison page.
A pricebook is a saved catalog of your standard services, products, and their prices. Instead of recalculating costs for every job, you select pre-set line items, which keeps quotes consistent and fast to build. A well-maintained pricebook also reduces errors and makes it easier to update pricing across the board when costs change.
An ACH payment is a bank-to-bank electronic transfer made through the Automated Clearing House network in the United States. It moves money directly between accounts, which usually costs less in processing fees than card payments, making it attractive for larger invoices. ACH transfers typically take one to a few business days to settle.
Net terms specify how many days a client has to pay an invoice after it is issued. "Net 30," for instance, means payment is due within 30 days of the invoice date. Offering net terms is a way to extend short-term credit to trusted clients, though longer terms can slow down your cash flow.
Milestone billing ties each payment to the completion of a specific, agreed deliverable rather than to a calendar date. When a defined milestone is reached and approved, the corresponding invoice is issued. This approach is common on project-based work because it links payment directly to results both sides can verify.
Recurring billing automatically charges a client on a set schedule, such as monthly or annually, for ongoing services. It is ideal for maintenance plans, subscriptions, and retainers, where the same amount is owed each cycle. Automating these charges saves time and reduces missed or late payments.
A client portal is a secure online space where your clients can view their quotes, invoices, documents, and payment history, and often pay or sign without emailing back and forth. It gives clients self-service access around the clock and reduces the administrative load on your team. A portal also centralizes communication, so important records are easy to find for both sides.
Tabsy brings estimates, quotes, invoices, deposits, and a client portal together in one place. Book a demo and we'll show you how it fits your business.
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