"We need a website" can mean very different things: a page that presents the company, an online store, or a system where clients log in, place orders and track them. Naming the task correctly at the start saves both money and disappointment.
What a website does
A website mainly presents information: who you are, what you offer, why to trust you and how to get in touch. Its key qualities are clear structure, good texts, speed, visibility in search engines and convenient contact forms. Content is usually the same for every visitor and is edited through a simple admin panel.
What a web application does
A web application lets users do work: create and edit data, place and track orders, manage accounts, see personal dashboards, collaborate with others. It has user accounts and roles, business logic, integrations with other systems and much stricter requirements for security and data reliability. Online banking, a CRM or a booking system are web applications.
Why the difference matters
The two differ in effort by an order of magnitude. A website is defined mostly by design and content; a web application by its processes, data and rules. An application needs a careful analysis of scenarios, testing of edge cases and ongoing maintenance after launch. Treating an application as "just a website" leads to underestimated budgets and missed deadlines.
Many projects are both
Often the right answer is a combination: a fast, well-optimised public website that attracts clients, and a separate personal account or internal system behind a login. They can share a design system and data, but each part is planned according to its own goals.
How to decide
Ask three questions. Do users need to log in? Do they create or change data that must be stored? Does the system need to follow business rules or connect to other services? If the answer to all three is "no", you need a website. If at least one is "yes", you are planning a web application, at least in part.
The short version
A website presents, a web application works. Define which one you need - or which parts of each - before discussing design, and the budget and timeline will match reality.