A quotation is an essential document provided by the seller informing the buyer of the cost of goods or services requested by the buyer that has sent a request for quotation. When a seller proceeds to creating a quotation for the buyer, the seller is setting a certain price for the goods or services that the company will be providing.
In order to gain quotation ideas, the following information, which can complement with a set of quotation templates, will aid you in fully understanding the essence of quotations in business.
Quotation vs. Estimate
Because of different factors affecting the stability of the prices of goods or services, companies resort to the use of a quotation and an estimate when it comes to responding to requests from potential clients.
- Quotation – This is a fixed price offered by the seller to the buyer. It is unchangeable once the buyer confirms his approval. The format for a quotation is illustrated on the quotation templates in Excel format provided on this website.
- Estimate – This pertains to a reasonable and an educated guess of the seller offers to the buyer. Contrary to a quotation, an estimated price does not bind the client to the price once approved. There are several estimates a seller gives so that the buyer is prepared for untoward events and situations.
When is a Quotation Used by Businesses?
There are different instances which compel a business to make use of a quotation with formats as seen on the quotation samples of this website. These following factors determine when a business transaction is in need of a quotation:
- There is specifications of needed work requirements such as materials, labor and production time.
- The costs for products or services is stable which can be used to define the fixed price.
- The seller is confident of the success of the work to be done when completed.
Essential Elements of a Quotation
The quotation formats, as provided on this website, show the key elements of a quotation which provides the important details to be stated on a quotation even with how different in content the quotation formats in DOC format are. The following are these elements and their respective descriptions:
- Total Price – It is vital on the part of the client to know the total amount of payment due from all the goods or services written on the quotation of the seller.
- Coverage of Price – This pertains to the breakdown of the prices, taxes, discounts, and the net cost of the products or services.
- Time Period – The duration of the business relationship between the buyer and the seller depends upon the terms of validity of the quotation.
- Schedule of Delivery – There should be a stipulation with regards to the date when the products should be delivered to the buyer.
- Business Details – Both the buyer and the seller must secure their valid contact information in order to have a certain legality and formality of the business relationship as a result of the quotation.
- Payment Terms and Conditions – The mode and time of payment is specified together with a payment schedule.
Make use of the importance of quotations in business transactions by creating the quotation using the sample quotation templates as guide.