Key takeaways
- Include a quote number, date, validity period, scope, prices, tax and terms.
- State how long the price holds — 15 or 30 days is common.
- Spell out what is excluded as well as what is included.
- Once accepted, the buyer usually issues a purchase order and you later invoice against it.
What a quotation should contain
- Quote number and issue date, so the buyer can refer back to it.
- Validity date — after which prices may change.
- A specific description of goods or services, with quantities and unit prices.
- Subtotal, any discount, tax and total in a stated currency.
- Delivery timeframe, payment terms and what is excluded.
- An acceptance line or instruction on how to accept.
Quotation, estimate or proforma?
| Document | What it is | When to use it |
|---|---|---|
| Estimate | An approximate price that may change | When scope is still uncertain |
| Quotation | A fixed offer for a set period | When scope is clear and you want a decision |
| Proforma invoice | A preliminary invoice issued before supply | For advance payment, customs or letters of credit |
From quotation to payment
- You send the quotation.
- The customer accepts and issues a purchase order.
- You deliver and issue a delivery note if goods are involved.
- You issue an invoice that references the quotation and PO numbers.
Frequently asked questions
Is a quotation legally binding?
In many countries an accepted quotation can form a contract, especially when the buyer confirms in writing or issues a purchase order. Local contract law varies, so take advice for high-value deals.
How long should a quotation be valid?
Most businesses use 15 to 30 days. Use a shorter period if your costs change quickly.
Should I include tax on a quotation?
If you are registered for tax, show the tax separately so the buyer knows the full cost.