What is a quotation?
A quotation, often called a quote, is a formal offer of price. A business sends it to a customer who has asked for a price, and it says what the customer will get, what it will cost, how long the offer stays open and on what terms payment will be made.
If the customer accepts the quote, it becomes the basis of the agreement. That is why a good quote is clear about the scope and the terms. A vague quote leads to disputes later, because each side remembers the deal differently.
In many industries, "quotation" and "quote" mean the same thing. In India, the word quotation is very common, and people often search for quotation formats because they need a clear template to follow.
A simple example to understand it
Meet Sneha, who runs a rooftop solar business in Nagpur. A small factory owner asks for a price for a 30 kW system. After a site visit, Sneha sends a quotation that includes:
- Quote number and date: Q-2026-118, with the date issued.
- Customer details: the factory's name, address and GSTIN.
- Scope: supply, installation, commissioning and net metering support for a 30 kW system.
- Items and price: modules, inverter, structure, cables and installation, with GST shown separately.
- Payment terms: an advance, a payment on delivery and the balance on commissioning.
- Warranty and service: the warranty terms and an option for an AMC.
- Validity: the price is valid for 15 days.
The customer reads it, asks one question, and accepts.
What a quotation should include
- Your business name, address and tax details.
- The customer's name and contact details.
- A unique quote number and the date.
- A clear description of what is included, and what is not.
- Quantities, rates and the total, with taxes shown separately.
- Payment terms and delivery or completion timing.
- Warranty or service terms.
- How long the offer is valid.
- How to accept it.
Quotation vs estimate vs proforma invoice vs purchase order
| Document | Sent by | Purpose |
|---|---|---|
| Cost estimate | You, for yourself | Work out what the job costs you |
| Quotation | Seller to buyer | Offer a price and terms |
| Proforma invoice | Seller to buyer | A preview of the invoice, often used before payment or customs |
| Purchase order | Buyer to seller | Place an order after accepting a price |
The quotation process
- Enquiry. The customer asks for a price.
- Survey or clarification. You visit the site or ask questions. See site survey.
- Estimate. You work out your cost.
- Quote. You send the price and terms.
- Follow-up and revision. The customer negotiates, and you may revise.
- Acceptance. The customer accepts, often by a purchase order or signed quote.
- Work begins. A job, and a work order, follows.
Common mistakes with quotations
- Quoting before understanding the job. A fast quote with a wrong scope is a loss waiting to happen.
- Leaving out the exclusions. If it is not written, the customer assumes it is included.
- No validity date. Prices change, and an open-ended quote traps you.
- Not keeping versions. After three revisions, nobody knows which one was agreed.
- Slow follow-up. A good quote that sits unanswered often goes to a faster competitor.
How ZEP360 handles quotations
In ZEP Sales, you create and revise quotations with status tracking and version history, and every deal's stage shows on a pipeline board. Quotations and proposals are built from the survey data, so what you quote matches what your team saw on site. They go to the client on WhatsApp, and your field team can capture customer signatures on a phone. When the client accepts, the approved quote moves into the project, so nobody retypes the client and site details. See solar project management software for how this fits with projects and stock.
Related terms
Cost Estimate · Bill of Quantities · Scope of Work · Purchase Order · Site Survey · Work Order
Frequently Asked Questions
What is the difference between a quotation and an estimate?
A quotation is a firm offer of price and terms sent to a customer. An estimate is an approximate calculation of cost, often prepared for internal use or as a rough guide. A quote is what you commit to, while an estimate is what you expect.
Is a quotation legally binding?
A quotation is generally an offer. If the customer accepts it within its validity period, it can form a binding agreement on those terms. The exact rules depend on the country and the wording, so take legal advice for large contracts.
How long is a quotation valid?
There is no fixed rule. Many businesses set 7 to 30 days, depending on how quickly prices change. State the validity clearly on the quote, and treat it as expired afterwards unless you confirm again.
What should I include in a quotation?
Your details, the customer's details, a quote number and date, a clear description of what is included and excluded, quantities and rates, taxes, payment terms, timing, warranty, validity and how to accept.
What is the difference between a quotation and an invoice?
A quotation offers a price before the work. An invoice asks for payment after the work or delivery. The quote's details often become the basis for the invoice, which is why they should match.
Can I change a quotation after sending it?
Yes, but keep a record. Issue a revised version with a new version number or date, and make clear that it replaces the earlier one. Keeping version history avoids confusion about which price was agreed.
Related Terms
