Here’s a step-by-step guidance for you to prepare a price quote template that will work for you.
Table Of Content
1. What Is Price Quote?
- Price Quote vs. Price Estimate
- Price Quotation vs. Proforma Invoice
- What Are the Different Types of Quotations?
- When Should You Send A Quotation?
- Is A Price Quote Legally Binding?
2. What Should You Include in A Price Quote Template?
3. How to build a good Price Quote Template?
4. Finding the Best Price Quote Solution For Your Company
5. Someka Price Quote Generator
6. Final Words
Whether you are a sales manager of an established company or an intern for a start up, your work will always include clients. And your business communication with clients has to be conducted through price quotations. Your price quotation is not only a piece of paper and a document that only has the prices for your products…and it should not be!
Here we’ll first discover what’s a price quote, then we’ll go through with elements that every price quote should include and we’ll explain you how to write a price quote with a step-by-step guiding. Lastly we’ll provide you with alternative price quote solutions.
1. What Is Price Quote?
In the simplest terms, a price quotation displays the number of products and their prices (along with their details) to your client. The document itself is written which can be handwritten on a piece of paper (which is not often advised) or can be digitally created.
Every price quotation has its limited time. This specific amount of time can be a couple of days, perhaps a week, a month, several years or an amount of time determined by both of parties of the agreement.
A price quotation is also known as a “quote”, a “quotation”, a “price quote”, a “sales quote” or a “service quote”. All of the costs of each of the goods, products and services need to be written. The addition of these individual prices will also show the overall cost of the whole agreement.
Due to the fact that there might be more than one cost for you to mention, a written quotation is much more the preferred method. If the agreement is done verbally, then the parties can lie, change the matters itself or even some of the details can be forgotten. So, if you have a written copy of the document on hand or available digitally, it can come handy. Alsoi if any contradictions or concerns arise, you can always bring out the copy to fix any of the problems.
a) Price Quote vs. Price Estimate
There has been much confusion and debate around the terms “price quotation” and “price estimate. Let’s quickly look at what these terms are and how they differ from each other.
Is price quote and price estimate the same thing?
No, they are not the same thing. The difference of the two terms lies in the certainty of the price. A price estimate is given by the supplier (or seller) as a guess. It is not a detailed, researched or even one hundred percent objectively correct piece of document. It might be written on a piece of paper or even on a napkin or not written at all.
For example: A new restaurant has opened up in your street and the owner wants to put up a sign. And you are a manufacturer that produces signs, banners and graphics. Without much detail, you write on a piece of paper that “it can cost $1000”. That is completely an estimate. You do not even know the size, the shape or how much time you are going to spend while working on it. You have just estimated the price for your product and service.
An Example:
Now, let’s say the owner of the restaurant wanted to know exactly how much the sign would cost. Then you can write the expanses of the material and your physical work. The exact prices of the products you are selling and the service you are providing should be noted on the document. Now, you have successfully created a price quotation.
The most important part you must not forget as a supplier is making sure that the client knows whether the document is a quotation or an estimate. You need to clearly differentiate the two documents. The distinction between them is crucial and confusion between the parties can cause serious consequences.
b) Price Quotation vs. Proforma Invoice
Now another two concepts that people usually mix.
The key difference between the price quote and proforma invoice is the time of the document is sent to the buyer. A proforma invoice is sent after the buyer ensures the seller that a purchase is going to be made. A number of different and slightly adjusted proforma invoice documents can be sent to the buyer and the details can always be changed based on the wishes of the customer.
c) What Are the Different Types of Quotations?
There are different kinds of quotations and document templates to be used for different purposes.
Price Quotation:
A price quotation gives the customer the information of the individual and total cost of a job. It contains details of the company and the client which you can read below in the next chapter of this blog post.
Sales Quotation:
A sales quotation is the summary of all the products or the services the buyer is buying. It contains the details of the order of goods and the prices. You can find sales quotation templates whenever you shop online. The prices, details and the general summary of the products in your cart that you are about to buy is actually a sales quotation document.
Purchase Order:
A purchase order is the initial official offer from the buyer. It details types of product or services, the volume of the products and the prices for them. This official document (after it has been agreed by both of the parties) gives the buyer the chance to buy the products detailed in the order and pay sometime later. A purchase order -often abbreviated as PO- can be accepted or rejected by the seller, if the terms of the order are not agreed upon. And, each one has to carry a PO number for an easy tracking. You can use purchase order generator to create your po doc.
Business Travel Quotation:
Business trips are covered by this kind of quotations. For example, the price of the travel ticket, the accommodation details and overall transport costs can be given to details that should be included in this document. This type of quotation is often sent by travel agencies to individuals, companies and employees.
Corporate Event Quotation:
Corporate events often include decorations, catering, staff, music (or a DJ) and additional requirements. And the job for organizing an event and taking care of all the entertainment is done by event planners. The quotation documents the company receives from the event planner for the most part contain multiple quotations from all the individual companies that offer its services.
d) When Should You Send A Quotation?
The important answer to the question ‘when should you send a quotation?’ is as soon as possible.
The quick and professional response with a price quotation can make you a ‘top choice’ for your client. Whether you are a buyer or a seller, you do not want to sit and wait for other people to send you how much they are willing to sell their product. The faster you send them a quotation, the more chance you will have on getting hired.
However, it should also be noted that if you did not take enough time to create an efficient and professional quotation document, the speed of sending it would be irrelevant.
Your quotation can still look ugly to the client, even if you send it quickly. So, take the necessary time, care and attention to, firstly, create your own price quotation document.
e) Is A Price Quote Legally Binding?
The legality of a price quotation can be a slippery slope. Under contract law, a quotation is not legally binding. It is not a binding contract because it is not officially (and legally) an offer. However, if both of parties accept the price quotation and later, the buyer makes an offer to the seller, that creates a legally binding document.
A quote is neither a promise nor a contract nor an offer.
It can be a confusing subject so let’s examine some examples:
- If the buyer sends the quotation, it does not become legally binding.
- If only the seller accepts the quotation, it does not become legally binding.
The only thing the quotation needs to become legally binding is to turn into an offer and a contract, respectively. Let’s say you (as the buyer) sent a quotation to your potential customer. The customer accepted the quotation and sent you a purchase order. Now, the quotation became an offer. And if you accept this offer as the buyer, you turned the offer into a contract.
Nevertheless, talk with your potential client in detail about the state of the agreement and make sure you are both on the same page on the legality of the document.
2. What Should You Include in A Price Quote Template?
Now you know what it is, let’s examine what it contains. Each detail and information in a price quotation template should serve a purpose and should be helpful for both your client and your company. Nothing trivial should take up space on the page, every information relevant to the job, your product or your previous conversations with the customer.
Below, you can find a list of some of the fundamental items that should be included in a quotation template:
- Your name, address & logo
- Quote ID or number
- The current date
- The due date(s) or deadline(s)
- The customer’s company name, ID and address
- The contact person’s name, email address and/or phone number
- Project description/job description
- Quantities of individual products or services
- Individual pricing of products or services
- Taxes or additional costs
- Overall cost
- Payment terms or payment type
- Bank account information
- A ‘valid for’ or ‘valid until’ date or time
- Terms and conditions of the agreement
- Space for client signature
Additional notes:
These are the basic and required information for nearly every agreement. That is why you need to adjust these items in order to perfectly suit your own price quotation.
3. How to build a good Price Quote Template?
Here’s easy steps to pursue while building your own price quote template:
1. Before You Start, Do Your Research!
It can be hard and somewhat overwhelming to start creating your own price quote template without looking at some examples. Search for other price quote examples and take notes.
For example: Some templates are designed to showcase your logo and make it the first thing a client sees. So that it would be easily distinguishable from other quotations your client has gotten from other companies.
However, some templates choose to put the company logo as small as they can.
Every price quotation template should have its own tax (VAT) and discount section. But you have to keep in mind that every country’s tax system is different. So you need to change and adjust that not only for the location of the client but also for the type of currency the prices are agreed on as well.
2. Make It Easy to Read
Unfortunately, not everyone has the time (or sometimes patience) to carefully examine every price quotation document. That is why it is important for your template to be easily readable. It needs to give the necessary information to the client who -perhaps- just glanced at the document.
This means making the important parts of the document big, bold and eye catching.
Prioritize the details and make your template an efficient one.
3. Be Open for Customization
Your prices, your discounts or additional information can change. That is why you have to construct your quotation to be easily customized. There might be situations that you need to change the details of a quotation in minutes and send it. Your template should be customizable for every client situation so that you do not create a new one every time.
4. Update… Everything!
As in the previous paragraph, everything can change. Even your logo and address might need to be updated in the future. Check, before you send the document to your client, if all the details are up to date. Make this process a regular one.
The most important information you need to check and update accordingly is the contact information. Your contact person, email address, phone number, etc. these are all the ways your client will be contacting to reach you. If that information is old and not updated, you will be missing your chance because the client would not be able to contact you.
5. Taxes and Discounts
Your taxes should be clearly read as the prices of individual products. Some companies choose to hide or conceal in the document. On the contrary, you should be putting the amount of taxes your customer has to pay as clear as every other information.
The same situation should be applied to the discounts as well. Whether you are applying a discount to the overall cost or for some of the individual products, make it easy to understand. Perhaps the most important factor of a price quotation template is that each information should be crystal clear. Therefore, there should not be any confusion, complicated details or complex language on the quotation template and thus, between the parties.
4. Finding the Best Price Quote Solution For Your Company
Now, you have read and successfully researched all the required details that come with a price quotation. After you learn about creating it, you need to start creating it. But how should you go by doing it and creating your own quotation fast?
You can choose to download third party templates which you can read on the next chapter of the blog post. Or you can also choose to use SaaS (Software as a Service) solutions in order to create a simple and a well designed quotation online.
Now, there are hundreds of different software that allow you to create your own price quotation document online. Some of these online price quote solutions are complicated and have a quite steep learning curve; however, some of them are extremely easy to use.
You can find some of the ‘easy-to-use ones’ below with their each individual features and what they bring to your business table:
Scoro
First up is Scoro. Scoro’s quotation software is fast and easy and at the same time lets you see the big picture for all of the items. In the same software, you can create your own quote, establish email lists containing your client’s contact details and manage each step of the process.
The formation of the quotations is automatic and can be done with a few clicks. The software itself holds sections for work and project management as well. That means you can conduct each and every process of your price quotations without changing a page. The price for the software starts at $26 for the monthly price, but you can try it for free for 14 days.
Bitrix24
Bitrix24’s quotation and invoice software is free. It comes with free unlimited quotations, free unlimited CRM (custom relationship management) and free unlimited invoices.
Other than its free features, the software stands out among others as it has integrations with Xero and PayPal for online payments. It has cloud storage for 5 GB and for 12 users for different quotations. It is an open source software (with the PHP programming language), so it is user friendly. And on top of that it is compatible with Android and iOS smartphones as well.
It has useful features and the free software itself is powerful and efficient. Bitrex24’s quotation software is certainly one of the best on the Internet.
DealHub
If you are using the Salesforce CRM or operate in Microsoft Dynamics CRM, then DealHub’s quotation software is the right choice for you. The software works natively in these CRM systems.
The software itself heavily focuses on the CPQ (configure, price, quote) approach. By studying critical business processes, the CPQ solution can give you a quote in just a few clicks. It is a fast and easy to use system; yet it is one of the most innovative platforms as well.
It enables you to save time and work faster and the great customer support system strives to achieve these as well. You can request a demo and agree on a price from their website.
After reading about three good online options, you might be wondering that can there be a disadvantage to online price quotation software. And there is.
The customization is hard or sometimes even does not exist as a feature in the software.
Of course, automation for some of the features is great and advances the process in a much faster manner. However, if you cannot customize your own price quotation template as you wish, then being fast about it does not make sense. You can quickly create a quotation template online, but it will be a template you cannot customize.
In order to fix this problem, you can choose to use third party templates that can be downloaded and can be used in familiar software. For example, a third party price quotation template for Microsoft Excel:
5. Someka Price Quote Generator
With this template, you can customize whatever you like, however you like! Someka’s Price Quote Template is fast and efficient. You can start creating, updating and preparing new quotes each in 30 seconds.
– This is the navigation menu of Someka Price Quote Generator –
The template itself consists of three main sections:
- Quote Generator
- Product/Service Database
- Quotation & Records Tracking
The professional looking and well structured template design makes an impact once it is viewed by the client. It can also be exported as a PDF file and can be printed for signings as well.
– This image is from Excel Quote Generator by Someka –
The Quote Generator is your document. You can put your own company’s logo, change the colors, fill up the information and customize your way through the template! The generator provides you all the necessary items that should be included in your price quotation template. You can also record the quote data to use it later.
The Product/Service Database is the thing that makes this template stand out among the other ones. You can enter information for a product or a service that you are selling, add information about the product, the unit volume of it, the unit price and the currency for it. After you have done it once, the database can save this product and all of its details. While you are creating a new quotation and want to put in that product, you can just select it from the dropdown menu!
Additionally, let’s say you put the link for your website for the related product in the information box. When you export the quotation template as a PDF file, the links are going to be clickable for your client!
6. FINAL WORDS
Your company’s price quotation is not a receipt that you give your clients. It has the prices of your goods, products and services as well as details about your company. Think of it as your business card that you are giving to a potential customer. When they look at the card, they need to become enthusiastic and excited about hiring you and working with you.
Ask yourself:
Would they want to work with me, if they only look at my company’s price quotation?
In order to do that you need to customize your quotation template to best show your brand. You need to give the proper care and attention for the document in the document itself. You need to be fast and efficient at the same time if you want to keep the conversation alive.
Recommended Readings:
Purchase Order vs Invoice: What’s the Difference Between PO and Invoice?
