What is a price quote?

A price quote is a written document (or a verbal agreement at times) given to a potential client by a seller, providing a fixed price for a project.  The fixed price given in a quote is valid for a set amount of time. If the quote is accepted by the buyer within the time frame, the price can not be changed.

You might also hear price quotes referred to as simply, ‘quotation’ or a ‘quote’.  

Quotes outline the costs and terms of particular services and/or products. Quotes summarise the terms of the project such as the timeline and any additional costs that may be incurred if the project changes.

A quote will include the following details:

• Business details (business name, number and contact information
• Total cost (and whether this is inclusive of tax or not)
• Breakdown of costs (list of any costs that will be incurred in the project)
• Variations (any add-ons that the client might wish to later purchase)
• Revisions (any additional work added to the project as it progresses)
• Schedule (start and end date and the total time that will be taken)
• Payment Terms and Conditions (how the payment needs to be made)
• The expiry date (when the quote’s price expires)
• Signature (of client and seller)
• Payment method (the type of payment and details of how to make it)

Quotes are essential for businesses that provide custom jobs and for services. Provided services can vary and therefore, a standard price list won’t work.

For example, the total cost of a tiling job depends on the type of tiles being used, the size of the area being tiled and the amount of time the customer wants it to be completed in.   A quote is usually written up after some consultation with the client. The consultation can simply be a phone call or the client could send some images of what they would like the final outcome to look like.

At other times, it might involve an onsite inspection or a back and forth conversation until an agreement is made.

Unlike an estimate, the seller must stick to the cost provided and complete all tasks outlined in the quote. If the value of the work ends up being more than what was quoted, the seller must still charge the same price. To protect yourself from this, you can include terms and conditions that outline what will happen in these instances and the additional charges.

Quotes are also helpful at protecting businesses from fluctuating prices. The time frame often reflects the nature of the item’s cost. For instance, a seasonal product’s price might vary month to month. In this case, the quoted price may be for a 30 day period.

Like a price quote, a sales quote is a quoted price given by a seller to a buyer but is specifically for products. A price quote can be used for both products and services.

A sales quote will list all the products, their quantities and prices. Discounts, taxes, terms and conditions and product information may also be included.

A sales quote is either accepted or rejected by the buyer. If the buyer accepts the quote, it becomes a sale order. The products, quantities and prices in the sales order are the same as they are in the sales quote.

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