There are so many quotation templates available on the internet, one of them is a price quotation template. Have you ever heard about a price quotation? A price quotation functions to give a fixed price for a service or product.
It is usually given to a customer, client, or supplier. It can be given both written or verbal, but mostly, a price quote is given in writing so that it is more formal. The price quoted is valid only for a particular period of time. And once the customers or clients have accepted it, the quoted price cannot be changed.
Moreover, the price quoted may be subject to particular terms and conditions. If you want to know more about a price quotation, this article will tell you all.
The Definition of Price Quotation
A price quotation is also known as a price quote. It is a document or verbal communication that delivers a fixed price for a project. The project can also be a product or service. A price quotation is given to a potential customer, client, buyer, or supplier. As it is said before, a price quotation is only valid for a limited period of time. For example, in the document, you can say that the price quotation is valid for 120 days.
Price Quotation Format
According to the Business Queensland, a price quotation can also include:
- Quote number
- Date of issue
- Supplier’s business details
- Client details
- A list of services to be provided
- A list of services that will not be provided
- Breakdown of costs
- The total cost of the project
- Extra costs
- Timelines and completion dates or deadlines
- Factors that probably affect the deadlines or completion dates
- The place for the client to sign their acceptance
- Payment methods, especially if a deposit is required
A price quotation is commonly found in the construction industry. It is also common in businesses that are based on services and provide special jobs. No projects are the same, this is why these kinds of business cannot use a standard price list. Instead, they use a quotation of price. A quotation of price is considered to be more concrete than estimates that only provide approximate prices.
Once a client has accepted a quotation, the supplier has to stick to the price quotation and finish all tasks mentioned in the quotation. If the supplier does more jobs than what is mentioned in the quotation, they still have to stick to the same price in the quotation.
So, as a supplier, it will be better if you include particular terms and conditions in the price quotation if you think that you will eventually do more jobs than what is written in the quotation. This is proposed to give details of what additional charges will apply. You are also suggested to talk to your client and discuss with them first about what they want and expect from the project. This way, you will be able to create the best and proper quotation of price.
However, you do not have to go over detail when you are writing a quotation of price. If your client wants the quotation of price to be detailed, they probably seek for a proposal or offering.
Price Quotation Sample
The Purpose of A Price Quotation
A price quotation is purposed to protect businesses from fluctuating prices. This is why a price quotation is valid only for a particular period of time. Though the labor costs probably stay fixed, the costs for materials can definitely be fluctuating, depending on the industry. So, it is crucial for you to analyze all of the costs. This way, you will be able to see which costs are fixed and which costs may change.
A price quotation is also proposed to provide customized prices according to special jobs. Such a situation is common, especially in the construction industry where each project is different. With a quotation of price, a supplier will be able to give a pricing that is more accurate to the client as well as make sure they will get a profit at the same time, according to the project’s specific needs.
How to Create A Price Quotation
- Choose A Template
First, you need to choose a template. Most price quotation templates are editable so that you can customize them. You can add the logo of your company to make it look more professional. The quotation of price templates are available in various formats, such as Word, Excel, or PDF.
- Add Client Information
Then, add information about who the quotation of price is for. It includes the name, title, phone number, e-mail address, address, and fax number, if applicable. Moreover, do not forget to also add your contact information. If your company’s letterhead already includes your contact information, you can skip it.
- Insert the Quote Number
If you are using accounting software, it will automatically produce a quote number for you. But it will be better if you are able to edit the quote number too.
- Add the Date of Issue
This is the date when you send the price quotation to your client. Date of issue is essential because the quotation of price is valid only for a certain period of time. You can extend or decrease the validation time if you want to.
- Enter Products or Services
Enter the product or service along with the description and other details, such as the quantity, unit price, total price per item, and so on. You probably want to separate the labor cost and material cost, or the product or service based on different project stages. Also, mention what is not included in the project, if there is any.
- Add Terms and Conditions
Add terms and conditions where you can calculate the factors that can affect any additional costs. You can also include how and when you want to be paid. For example, what payment methods you accept and whether you require a deposit or not. You can include these details in the payment terms.