A sales quotation is a seller's formal offer showing the products or services, quantities, prices, taxes, delivery terms, payment terms and validity period proposed to a buyer. It normally precedes a sales order or invoice. Whether acceptance creates a binding agreement depends on the quotation's wording, the parties' conduct and applicable law.
The fields that make the offer usable
The buyer shouldn't need to reconstruct an offer from an email chain. A usable quotation identifies both parties, defines the commercial scope and shows the conditions behind the price. Extra detail costs a little space; ambiguity costs far more once the order reaches operations.
- Quotation number, issue date and expiry date
- Seller and customer legal names and contact details
- Separate line items with descriptions, quantities, units and unit prices
- Discounts, taxes, shipping or other charges
- Total amount and currency
- Delivery location, lead time and fulfilment assumptions
- Payment schedule, credit terms and accepted payment methods
- Terms, exclusions and a clear method of acceptance
| Document | Main purpose | When used |
|---|---|---|
| Quotation | States a defined commercial offer | Before the buyer accepts or orders |
| Estimate | Forecasts a likely cost when scope or inputs remain uncertain | During early planning or discovery |
| Sales order | Confirms what the seller will fulfil | After acceptance or receipt of the buyer's order |
| Invoice | Requests payment for supplied goods, services or a contractual milestone | According to the agreed billing event |
From quotation to confirmed order
- Prepare the offer. Use approved catalogue data, pricing rules and customer terms.
- Review exceptions. Route unusual discounts, low margin, credit or legal terms to the right approver.
- Send one controlled version. Make the quotation number, revision and expiry visible.
- Capture acceptance. Record who accepted, when and which version they accepted.
- Create the order. Carry the accepted line items and terms forward without re-keying them.
Illustrative example: an offer with an expiry
A distributor quotes a Philippine retailer for a carton order, separating unit price, delivery, VAT treatment, lead time and deposit terms. The buyer accepts after the stated expiry. Sales now has to reconfirm price and availability. Treating the expired version as current would shift an avoidable cost or delivery risk into fulfilment.
Where quotations go wrong
- Leaving the currency or tax treatment unclear
- Combining unlike products and charges in one line
- Changing a price without issuing a traceable revision
- Using an open-ended validity period while supplier or FX costs move
- Creating the invoice from memory rather than the accepted version
If the quotation will become an order, build it from controlled catalogue and pricing data in Quotable quote software. The business document templates help with the document itself; the guide to quotations, invoices and purchase orders explains the handoffs.
