What is a quote?
A quotation, or quote, is a supplier's written offer to supply goods or do work at a fixed price, on stated terms, until a stated date. It answers a customer's enquiry or request for quotation (RFQ). If the customer accepts it, usually with a purchase order, the quote becomes the basis of the order.
In manufacturing it says what you'll make, to which drawing revision, how many, for how much, how soon and on whose terms. The enquiry it answers is covered in What is an RFQ?
What does a quotation include?
Who it's from and who it's for, your reference and the date, what you're supplying, the quantity and price, any one-off charges, the lead time, delivery and payment terms, what you've assumed, and the date the price holds until. Say whether prices include VAT; the standard UK rate is 20%.
The quotation template sets each of these out for made-to-order work, with a filled-in example. The price itself comes from your estimate, line by line, which the job costing template sets out.
What's the difference between a quote and an estimate?
A quote is a fixed price for a defined job. An estimate is your best guess at the cost while the job is still taking shape, so the final price can move. Trading standards guidance for businesses draws the same line. A quotation is normally a fixed price, and an estimate is a rough guess.
If the drawing, quantity or material isn't settled, call it an estimate or a budget price, and say what would change it.
| Question | Quotation | Estimate | Tender |
|---|---|---|---|
| What it is | A firm offer at a fixed price | Your best guess at the cost | A formal bid in the buyer's competition |
| Can the price change? | Only as the quote allows, such as a material surcharge | Yes, once the details are settled | Only as the tender rules allow |
| When it's used | Drawing, revision and quantity are fixed | Budget prices, early designs, prototypes | The buyer runs a formal process, often public sector |
| Whose format | Yours | Yours | The buyer's, by a deadline |
How is a tender different from a quotation?
A tender is a formal bid in a competition the buyer runs, on the buyer's forms, terms and deadline. Public sector work is listed on GOV.UK: Contracts Finder for government contracts over £12,000, and Find a Tender for high-value contracts. A quotation is less formal, and usually on your own terms.
When does a quotation become binding?
A quotation is a fixed price offer that can't be changed once the customer accepts it. From then on you have to keep to the price, even if the job takes more work than you expected, so say in the quote exactly what it covers and what would lead to extra charges. If the customer's purchase order carries different terms, check them before you accept the order.
What to check when the order arrives, and when to acknowledge it, is in Sales order processing.
This is general information, not legal advice.
How long is a quotation valid for?
Until the date written on it. There's no set period, so pick one you can stand behind, such as 30 days, and shorten it when metal or energy prices are moving. A quote with no date leaves it unclear how long your price stands, so always write one.
If the customer comes back after the date, check your material and outside-process prices again before you confirm the price.
Where can AI help with quotes?
With the reading and typing around the price: logging the enquiry, finding past quotes for the same part, drafting the quotation from your estimate, and chasing open quotes before they run out. The price and the sign-off stay with a named person.
Give it
- The enquiry and its drawings list
- Your finished estimate
- Past quotes for the same part
A person checks
- The price matches the estimate
- The revision is the one you priced
- The validity date and terms
The free check shows which of those jobs is worth handing over first, and what it costs you now.