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When do you need this document
A quotation is a formal commercial document sent by a supplier or service provider to a prospective buyer before any work starts or goods are dispatched. You need a quotation whenever a client requests an official estimate of costs, project scope, and completion timeframes. Submitting a clear written quotation establishes agreed pricing boundaries and protects both parties against unexpected scope disputes.
It is essential to understand how a quotation differs from a proforma invoice and a statutory tax invoice. A quotation is an exploratory pre-sales proposal that does not demand payment and carries no tax liability. A proforma invoice is issued after negotiations conclude to request an advance deposit or facilitate customs pre-clearance. In contrast, a statutory tax invoice is issued under Section 31 of the CGST Act at or before delivery, serving as the legal instrument creating tax liability and supporting input tax credit claims.
What the document must contain
A comprehensive commercial quotation should clearly outline every element of the transaction:
- Quotation reference number and calendar issuance date
- Supplier identity, including registered trading name, address, email, and phone number
- Prospective buyer details, including company name and designated contact person
- Granular scope rows detailing itemized goods, service deliverables, or project phases
- Unit prices, quantities, and applicable tax rates indicating whether figures are inclusive or exclusive of GST
- Explicit quotation validity date defining when the proposed pricing expires
- Commercial payment milestones, deposit terms, and delivery schedules
- Terms and conditions governing scope adjustments, cancellations, and client responsibilities
How to fill it step by step with this tool
Drafting a commercial quotation with this tool is straightforward and requires no account registration:
Step 1: Enter your business trading name, contact details, and address in the supplier section.
Step 2: Enter the prospective client details, including the decision maker name and company address.
Step 3: Assign a unique quotation number and specify the issuance date alongside the quotation validity period.
Step 4: Add individual line items for each service deliverable or product, entering units, quantities, and rates.
Step 5: Define payment terms, advance deposit percentages, and work conditions in the notes field.
Step 6: Review the live A4 preview on the right and click Download PDF to generate a clean document to email your client.
Common mistakes
Avoid these frequent commercial errors when issuing price quotations:
- Omitting quotation expiration dates: Without an expiry date, buyers may attempt to lock you into quotes months later after your underlying labor or material costs have risen. Standard practice is a 15 to 30 day validity window.
- Vague scope descriptions: Using broad descriptions such as software work or renovation without itemized deliverables causes scope creep during execution.
- Unclear tax treatment: Failing to specify whether quoted rates include or exclude GST leads to disputes upon final invoice delivery.
- Treating a quotation as a tax invoice: A quotation cannot be used to demand final payment or report sales turnover for GST returns.
Frequently asked questions
Manage your entire sales and contracting workflow with our companion tools:
- Proforma invoice maker for requesting advance payments after a quotation is approved.
- Purchase order generator for issuing formal procurement commitments to your own vendors.
- GST tax invoice maker for issuing final tax bills once orders are fulfilled.