Price quotation

A price quotation is a formal document stating the exact price at which a seller will supply specified goods or services to a named buyer. It differs from an estimate, which is an approximation given on incomplete information and can move as the scope becomes clear. It also differs from a tender, which is a priced submission made in response to a formal invitation, usually against documents the buyer has written and against competing bidders working to the same scope. A quotation is the everyday version of the same act: a fixed offer, made on the seller's own terms, open for a stated period.

Because it is an offer, acceptance without amendment normally forms the contract. That is the whole reason the distinction from an estimate matters, and it is why a quotation issued casually is more dangerous than one that took an extra hour.

What a price quotation must contain

To be usable as the basis of a contract, a quotation needs enough detail that both sides can tell what was and was not priced. In UK trade practice that means the scope of supply, the price per line and in total, whether VAT is included or added, the lead time, the payment terms, and the date the price expires. Exclusions carry as much weight as inclusions: work priced by nobody is the standard source of a disputed final account.

Line-level pricing is the norm in B2B trade rather than a single figure. A fit-out contractor separates labor, materials and preliminaries. A promotional merchandise distributor shows the unit cost, the setup fee, the run charge per unit and the decoration method as separate lines. The buyer can then compare quotations properly, and any later change has an agreed rate to be priced against.

Quotation, estimate, tender and pro forma

These four documents get used interchangeably and mean different things when they are tested. An estimate is an approximation and carries no fixed commitment. A quotation is a fixed offer for a defined scope. A tender is a competitive priced bid submitted against the buyer's own documents, often with pre-qualification and a formal return deadline. A pro forma invoice is issued after the commercial decision, looks like an invoice, and is used to request payment in advance or to satisfy customs paperwork; it is not a demand for payment under an existing debt.

The commercial risk is the same in each case and sits at the same place: the quotation defines what was promised, so the point at which margin is decided is the point at which the document is written. Quotation validity covers how long to hold the price open and what to do when it lapses, and Zigaflow's quotes hold the line detail, the version history and the expiry date on one record.