What Is A Quote In Business?

Last Updated September 14, 2023

For customers, knowing the cost of a service before committing to buying and paying for the service can be extremely helpful when budgeting and balancing opportunity costs.

Thankfully, there’s a document that helps both the buyer and seller get a better idea of price estimation: a business quote.

What Is A Quote In Business?

A quote in business, also known as a price quote, is an estimation document sent by a seller that tells the customer, in detail, how much a specific project or service is expected to cost.
In business, a price quote is often referred to as just a quote. Some businesses charge customers for providing a quote, while others offer free quotes. Businesses that offer free quotes should market that to potential customers.

When To Provide A Quote

A quote is issued to the customer before work has begun and before any verbal or written agreement on a potential business partnership has been made. A quote in business is legally binding once it has accepted and signed by the buyer, meaning it should only be issued when the service provider is absolutely certain that all costs involved are included and accurate.

[av_post_cta animation=” av_uid=’av-mgiwbz’ custom_class=” admin_preview_bg=”]

How To Write A Quote For A Job

Writing a quote for a job is similar to writing an invoice, as both documents contain similar information.

Follow these steps when designing your price quote:

  • Denote your company name at the top of the quote
  • Make sure it is clearly labeled as a quote near the top of the document
  • Add your business’s details (contact information and address)
  • Add client details
  • Remember to include the quote number
  • Note date of issue and how long the quote is valid
  • Detail an itemized list of goods or services that are expected to be provided and their respective costs
  • Apply terms and conditions
  • Include any additional notes

These steps can be seen in the below construction quote example.

Construction Quote Example

construction quote example

Additional details in the quote might include any discounts provided, tax explanations, or other specific details of the job that might not be made apparent in the description.

When providing a quote for services, know that every business quote example or template might look a bit different in terms of its design. As long as you have all of the necessary information and exact costs laid out in a professional manner, the quote will suffice.

Quotation Templates

There are many professional quotation templates available for use online. Most templates will look similar to and contain the same information as the quote shown above. Quickbooks offers advice on business quote templates, along with templates for other professional documents, such as different types of invoices, financial statements, and more.

When you’re searching for the right price quote template, remember to ensure it’s a template that matches your application of choice, whether that be Google Docs, Google Sheets, Excel, or Microsoft Word.

Quote vs. Estimate: What Are Their Differences?

You might think a price quote and an estimate in business are the same, as both documents outline the costs for a future project or service.

However, it’s crucial to know that a quote and an estimate are not the same. Below are some of the differences between a quote and an estimate.

Price Quote Estimate
Should provide an exact total (a set price) of the cost of a potential project or service Provides a general estimate of a cost for a future project or service
Is considered legally binding once accepted and signed by the customer Is not considered legally binding
Typically only one quote is provided to the customer Several estimates may be provided in situations where various circumstances could affect potential pricing for a project or service

Quote vs. Invoice

In addition to getting confused with an estimate, a quote also tends to get misconstrued as an invoice. These two documents are similar, and can both be beneficial, but they are not the same.

While a quote provides projected costs before any work has begun, a standard invoice is issued after work is complete and once payment is due.

Where it can get confusing is the fact that there are different types of invoices. One type of invoice that is particularly similar to a quote is a pro forma invoice.

Similar to quotes, pro forma invoices are issued by buyers to sellers before the transaction occurs. A pro forma invoice details the sale, including much of the same information you might find on a quote.

However, the difference between a pro forma invoice and a quote is that the former is sent once prices have already been agreed upon. When a quote is issued, there are still details yet to be agreed upon, including the price.