Glossary
What is a quotation?
What a quotation is, what it should show a buyer, and what happens to it once the customer says yes.
Updated
In short
A quotation is a priced offer sent before a sale, showing items, rates, tax, total and an expiry date. SimpleERP quotations expire on their date and convert to a sales order or invoice without retyping.
A quotation is a priced offer a seller gives a buyer before a sale: the items or services, quantities, rates, tax, total and how long the prices hold. If the buyer accepts before it expires, the sale goes ahead on those terms. It is not a bill and records nothing in the books. It is also called a quote or an estimate.
Quotation: a worked example
Riverside Stores asks Harbour Steel Furniture, a fictional furniture maker pricing in US dollars, for prices on racks and chairs, with tax at 20%.
| Item | Qty | Rate | Amount |
|---|---|---|---|
| Steel rack 4 shelf | 20 | $499 | $9,980 |
| Office chair mesh | 10 | $645 | $6,450 |
| Value before tax | $16,430 | ||
| Tax at 20% | $3,286 | ||
| Total | $19,716 |
FAQ
Questions, answered
What is the difference between a quotation and an invoice?
A quotation is an offer made before the sale; the customer can accept, negotiate or decline. An invoice is the bill raised after the goods or services are supplied. Only the tax invoice records the sale, the tax and the amount owed.
Should a quotation include tax?
Yes. Show the value before tax, the VAT, GST or sales tax rate and amount, and the total, so the buyer compares the real price. Where the rate depends on where the goods go, say which applies. A quotation that hides the tax invites an argument later.
How long should a quotation be valid?
Long enough for the buyer to decide, short enough that your costs do not move. Fifteen to thirty days is common for goods whose input prices change, such as steel. SimpleERP defaults the expiry to 30 days and you can change it on each quotation.
Can I change a quotation after sending it?
Send a revised quotation rather than editing the old one, so both sides know which prices were offered when. In SimpleERP a sent quotation is frozen and Revise copies it into a new draft for the changes.
Related
Keep reading
Quotation format
A quotation format with tax shown line by line, as a free Excel, Word and PDF download.
Read moreSales order
The seller's record of a confirmed customer order, between the quotation and the tax invoice.
Read moreCRM
Leads, a deal pipeline, today's follow-ups and conversion to customer and quotation.
Read more
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