Glossary
What is Quotation?
A quotation is a written price offer given to a customer before a sale is agreed, listing items, quantities and prices. It is not a tax invoice, records no sale and moves no stock. If accepted it usually becomes a sales order or an invoice.
A quotation is the price you are prepared to sell at, written down so the customer can compare, negotiate and decide. Sending one sells nothing: no bill number is used, no stock leaves and nobody owes anybody anything.
What a quotation should contain
- Your business name, address and PAN, and the customer’s name.
- A quotation number and date.
- Each item or service with quantity, rate and any discount.
- VAT as its own line if you are VAT registered, so the customer sees the full price.
- A validity date, after which prices can change.
- Delivery time, payment terms and anything excluded, such as transport or installation.
How it works in practice
As an example, a school asks an office furniture supplier for 30 desks with delivery and fitting. The supplier sends a quotation valid for 15 days. The school asks for a better rate on the desks, the supplier sends a revised quotation with a new number, and the school accepts it in writing. That acceptance becomes a sales order, and the tax invoice is issued when the desks are supplied.
How it differs from a tax invoice and a sales order
A tax invoice records a sale that has happened. It carries a sequential number and is the document your VAT is reported from. A quotation records none of that, and it is good practice to say on it plainly that it is not a tax invoice. A sales order sits between the two: the customer has agreed, but nothing has been delivered or billed.
Common mistakes
- No validity date, so a customer comes back months later expecting last season’s price.
- Leaving VAT out, so the accepted price and the billed price do not match.
- Reusing the original number on a revised quote, which makes it unclear which version was accepted.
- Writing quotes in the invoice book, which uses up invoice numbers on sales that never happened.
You can build one with the free quotation generator, or fill in a quotation format in Excel. Kuver Books has no separate quotation document. A draft sales order holds the agreed prices and converts into a tax invoice once approved, as the sales orders page explains.
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