FREE Why Quotations are Used [ Difference, Uses, Elements ]

A quotation is a document sent by a seller to a potential customer that contains the prices of the goods and services that they offer. Quotations are important tools in business in order to develop a business relationship with an interested party. You can start one by making a quotation in Excel.

Creating a quotation template requires you to gather all the necessary information, prices, etc., in order to make it easier to make one. If you want to learn more about a quotation in business, read more about it below. Also, there are downloadable samples available on this page.

What Is the Difference between Tender and Quotation?

Both a tender and quotation are essential documents in the operations of a business. Although these are commonly used terms in business, both documents have their differences. These differences are as follows:

• A quotation is a document sent by the seller to the buyer that contains the prices of the goods and services offered. Tender, on the other hand, is a legal offer to supply certain goods and products.
• A quotation simply contains the prices of the goods and doesn’t necessarily need to be accepted or rejected, while tendering needs to be accepted or rejected by the other party.

What Are the Uses of Quotation?

Here are the uses of quotation in business. There are also quotation formats in PDF available on this page to help you in formatting your document.

• A quotation is mainly used in businesses where it is sent to potential clients for the purpose of informing them of the prices of the goods and services that they may want to purchase.
• Through a quotation, clients or customers will be able to decide whether they want to purchase these products.
• Quotations are used to build business relations between the business and the client.

Essential Elements of a Quotation

A well-written price quotation shows professionalism allowing you to secure new clients for your business. Here are the essential elements of a quotation to help you outline your own quotation.

• Business details – a quotation should include the relevant information about your business such as the name, address, contact number, and other important information.
• Breakdown of costs – write a list of the costs of each product and the service quotation for labor.
• Total cost – specify the costs for the materials, labor costs, etc.
• Variations – a quotation also includes the factors wherein the prices of the products and services may increase.
• Schedule – this section contains the schedule when a job is going to be done or when a particular product is delivered.
• Terms and conditions – a quote should indicate the terms and conditions when purchasing.
• Expiry date – a quotation also includes an expiry date. A client needs to provide a response to the business before the quotation expires.
• Customer signature – if a client accepts the offer, he or she will need to sign the quotation.
• Payment methods – a sales quotation should also include the methods that a client can pay, may it be through a credit card, cash, etc.