A quote, also known as a quotation, is a document issued from a business to a potential customer outlining how much the requested products or services will cost. Quotes are issued early in the sales process, before an invoice, and help the customer determine if they would like to continue with the purchase.
This article explains what details you should include on a quote, how they fit into the sales process, and how they differ from estimates, proforma invoices, and invoices. A sample quotation is also provided.
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How to write a quote
Although quotations aren’t legally binding documents, they should include certain details so the customer understands exactly what the sale is for. A quote should have most of the same information as an invoice, including:
Your business name and address
Your customer’s name and address
A unique quote number
The date the quote was issued
The date the quote expires
The description, quantity, and price of the products or services
Sales tax (if applicable)
The total amount
It’s also recommended to include your payment terms, including discounts and late fees on your quote. We also recommend clearly stating ‘Quote’ or ‘Quotation’ on the document to differentiate it from other sales documents and let the customer know that payment is not required.
Quote example
Below, you’ll find a sample quote created with SumUp Invoices. The quote is easy to understand and includes all of the recommended fields. It’s also customized with a logo, business information, and the Terms & Conditions.
What’s the difference between a quote and an estimate?
Quotes and estimates are both issued at the early stages of a sale before the customer has committed to the purchase. However, a quote will show a fixed price that will not change if the customer accepts the quote. An estimate, on the other hand, is an estimated cost that may change.
Not all businesses will be able to issue quotes. For instance, in construction, you may need to take exact measurements in order to provide an exact price. In this case, an estimate can be issued before the measurements are taken, but it should be clearly written on the document that the price may change.
To sum up, quotes and invoices are issued to a potential customer who is asking for your prices. Quotes include a fixed price that will not change (unless the customer requests extra work), while an estimate is an estimated price that may change.
What’s the difference between a quote and a proforma invoice?
While both documents may seem similar, they are issued at different stages of a sale. A quote is issued prior to the customer committing to the purchase, whereas a proforma invoice is issued after the customer has committed to the sale but the final details on the invoice may change.
Quotes and proforma invoices are not legally binding documents, but both can be converted into a finalised invoice. When a finalised invoice is issued, the payment is due and the sale is binding.
What’s the difference between a quote and an invoice?
Quotes and invoices are issued at different stages of a sale. While a quote is issued to a potential customer prior to them committing to the sale, an invoice is issued after the sale has been completed and it’s time for the customer to pay. An invoice is an official request for payment that must include mandatory invoice fields.
Another difference is that a quote can be converted into an invoice, but you can’t convert an invoice into a quote.
Sales tax on quotes
If your business is registered for sales tax in the state you’re invoicing to, you should apply sales tax to the quote. This will let the customer know exactly what price they’ll pay and help you easily convert the quote into a tax invoice.
Do quotes expire?
If your business issues quotes to customers, it’s recommended to include an expiration date. If you don’t, the customer could attempt to get the quoted price a few years later, after your prices have increased.
It’s up to your business to determine the best practice for quote expiration. Depending on your industry, this may be between one week to one year.
Invoicing software with unlimited quotes
Invoicing software is specifically designed for creating professional sales documents and can save your business time and money. It not only helps you create invoices, but it can also help you create quotes and other sales documents.
SumUp Invoices is invoicing software that includes unlimited quotes. With our simple quote template, you just need to enter the customer and product details, and the system will do the rest for you.
On your quote, you can include discounts, terms and conditions, and additional attachments. You can also change the language of your quote if selling to a foreign customer.
Your quote will be sent directly to your customer’s email. If they accept the quote, you can convert it into an invoice with 1 click. You can also include a payment link on the invoice to quickly accept online credit card payments.
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