Quotation Format

A quotation is sent before you've completed work or confirmed the sale, while an invoice is issued after you've delivered goods or services. Send a quotation to outline pricing and terms for a potential project, allowing the client to review and approve before you proceed. Once the client accepts the quotation and you've fulfilled the work, you then issue an invoice to request payment. This sequence protects both parties by establishing clear expectations upfront and ensures everyone agrees on scope, pricing, and timelines before any commitment is made.

A quotation focuses specifically on pricing and cost breakdown for services or products, while a proposal is broader and includes the quotation plus additional elements like scope of work, timeline, methodology, and terms and conditions. You might send a proposal to a large client needing extensive context, and a simpler quotation to a returning customer who already understands your services. Both documents serve as non-binding offers until accepted, but proposals add strategic and operational details that quotations typically skip. Choose based on client expectations and project complexity.

Most quotations are valid for 14 to 30 days, though this varies by industry and agreement terms. Shorter validity periods work well for volatile markets or time-sensitive pricing, while longer periods suit stable service businesses. Clearly state the expiry date on every quotation so clients know when they must decide. If a client needs more time, you can extend the validity date in writing, but don't feel obligated to honor outdated quotes without discussion, especially if your costs have changed or market conditions have shifted significantly.

Yes, include applicable taxes (sales tax, VAT, GST) clearly itemized on the quotation so clients see the full cost they'll pay. Show the subtotal, tax calculation, and total separately so there's no confusion about final price. Some B2B quotations to tax-exempt businesses may exclude tax upfront, but this should be explicitly noted and verified before finalizing. Transparency on tax handling builds trust and prevents payment disputes after acceptance.

Include enough detail to answer what the client is paying for without overwhelming them—typically one to three lines per item. For example, 'Website Design and Development' benefits from clarity like 'Custom 5-page responsive website with contact form integration,' not vague phrases alone. More detailed descriptions reduce client questions, speed up decision-making, and prevent scope creep later because everyone agrees on exactly what's included. However, save extensive methodology explanations for proposals; quotations prioritize clarity over comprehensiveness.

Revise the quotation with the requested changes and send an updated version with a new date. Clearly mark which items or terms have changed so the client can easily spot the modifications. If changes significantly impact pricing or scope, discuss these implications with the client first rather than presenting a drastically different quotation. Document all versions to maintain a clear record. Minor adjustments are normal; handle them promptly to keep the sales process moving forward.

Once a client formally accepts a quotation—typically by signing it, emailing approval, or meeting the terms—it becomes a binding agreement between both parties. From that point, you're committed to delivering the specified services at the quoted price, and the client is committed to paying. This is why clarity in quotation language and terms is critical; ambiguous quotations can lead to disputes. Some businesses require written acceptance; others accept verbal approval. Whatever your standard, be consistent and document acceptance clearly.

Yes, tailor quotations to client expectations and industry norms. A freelancer's quotation to a small business might be simple and direct, while a contractor's quotation to a corporate client may require more structure, compliance details, and formal terms. Service-based quotations emphasize hourly rates or project scope, while product quotations focus on unit costs and quantities. Researching client expectations and industry standards ensures your quotation format feels professional and increases acceptance rates. Consistency in your own format across similar client types improves efficiency and builds brand recognition.