How to Write a Quote in 8 Easy Steps: A Step-by-Step Guide to Quoting

Well-written, accurate sales quotes are powerful tools that can help businesses win new customers, secure deals, and increase profitability. A professional, detailed proposal demonstrates that you understand a potential client’s needs and helps set your business apart from competitors. By precisely describing what is being offered, at what price, and under what terms, accurate quotes help build trust and long-term relationships with customers. They can also help ensure each deal is profitable for the company and protect it from scope creep.

This article provides an easy-to-follow, step-by-step guide to quoting.

What Is a Quote?

A quote, also known as a sales proposal or quotation, is a document that a business provides to a prospective customer to offer goods or services at a specified price and with defined terms. In some circumstances, the terms of a quote can become legally binding if it’s formally accepted by the customer. It’s therefore vital that quotes are accurate and provide enough detail to clearly define the extent, terms, and cost of the proposed solution.

A quote differs from an estimate, even though the terms are sometimes used interchangeably. A quote provides a precise description of product and service costs, while an estimate typically gives the customer only a broad outline of a proposed solution and an approximate cost. While the prices and terms in a quote are fixed and can become binding once accepted, estimates are usually nonbinding and subject to change.

Key Takeaways

• Precise, detailed sales quotes can help you win business, build customer relationships, increase profitability, and efficiently allocate resources.
• A quote should include a list of proposed goods and services and their prices, contact information for your company and your customer, plus applicable terms and disclaimers.
• Templates can help businesses produce professional quotes in a consistent format that includes all the required elements.
• CPQ (configure, price, quote) software that’s integrated with other business applications can help produce quotes faster, with less administrative effort, and with greater accuracy.

What Information Needs to Be Included in a Business Quote?

A business quote should include, at a minimum, a list of the goods and services to be supplied, the price of each item, total cost (including taxes), and payment terms. The quote should also include name and contact information for your company and your customer. In addition, it should include any disclaimers and conditions. For example, businesses commonly specify that quotes are valid for 30 days, to protect themselves against potential increases in the costs of raw materials or labor.

Benefits of Sending a Precise Business Quote

An accurate, detailed quote provides benefits both to your business and to potential customers. It helps the business win, and build trust with, new customers. By clearly defining a proposed solution, a quote can help prevent project creep. It can also help plan and manage business finances. Here are some of the key benefits of providing a precise sales quote.

• Demonstrates your trustworthiness and reliability to the client: A clear, well-thought-out quote shows that you’ve put in the time and effort to understand the client’s needs and explain how your solution will meet them. It demonstrates that you have the know-how and resources to deliver, and helps your proposal stand out when compared to competitors’ bids. Because a proposal may be binding once accepted, it also demonstrates your commitment to providing the specified products or services within the agreed-upon time frame.
• Provides transparency for project expectations: A quote also helps the customer see exactly what they’re paying for and develop a better understanding of all the resources that your business is putting into the project. That transparency means they may be more likely to accept your bid. It also makes for smoother project management later, with less potential for misunderstandings and disputes, since they’ll be able to see that you are delivering what you promised.
• Communicates project scope and prevents scope creep: A precise, detailed quote shows all the items that fall within the scope of the project—and also makes clear what’s not included in the scope. That helps create clear project boundaries. It also contributes to subsequent project management by helping to prevent situations where the scope expands because of informal client requests or a lack of definition about what’s included. Scope creep can lead to budget overruns that either sap profits or create friction with clients.
• Lays the foundation for future projects: Quotes that accurately reflect what the business ultimately delivers help to build trust with the customer. That’s a big step toward establishing a strong, long-term relationship in which your business becomes that customer’s preferred supplier. It also means the customer is more likely to recommend your business to other potential customers. Additionally, the work you put into building a detailed quote can save time on bidding for future projects, because you may be able to reuse or adapt some of the elements in the quote.
• Helps ensure profitability: Creating a detailed, accurate quote helps protect profits. Building the quote involves examining all the resources required to provide the proposed product or service, including labor, materials, and overhead. With a true picture of the costs, you can price the project so as to ensure that you make a profit while remaining competitive.
• Improves financial management, project planning, and resource allocation: Once it’s accepted, a good quote can provide a blueprint for internal operations, helping a business efficiently allocate resources and manage projects better overall. An accurate description of the time and materials needed helps with setting schedules and ordering the right supplies. Over time, accurate quotes can also contribute to a business’s forecast revenue and cash flow, and help to determine how many projects can realistically be taken on without over-committing or under-utilizing resources.

How to Write a Business Quote

Establishing a standard process and format for sales quotes helps a company produce proposals more quickly and ensure that each quote includes all the required information. Selecting a good quote template is a great start, but it’s also important to carefully consider each section of the quote to make sure it’s accurate, clear, reflects the client’s needs, and protects the business. Configure, price, quote (CPQ) software can accelerate quote creation and improve accuracy through templates that automatically pull in up-to-date customer, inventory, and pricing information. Here’s a step-by-step guide to writing successful business quotes.

1. Select a Quote Template (or Create Your Own)

Using a standard template helps create quotes that look professional, have a consistent format, are generated quickly and easily, and include all the required elements. Many templates are available online, including some designed for specific industries—but if you can’t find one that meets your needs, it might be worth creating one. A template customarily includes basic information that goes into every quote, such as the company name, logo, and contact information, as well as standard terms and conditions. It should include the word “Quote,” “Proposal,” or something similar near the top of the document, to make sure its purpose is clear. Some templates include preformatted blank sections for certain parts of the quote, such as for providing an itemized list of goods and services and their prices.

2. Enter the Quote Number and Date of Quote

Assigning a unique number to each quote helps track the progress of each proposal and comes in handy when communicating with the client; it’s important to also include the date on which the quote was sent to the client. Typically, businesses stipulate that quotes are valid only for a specific length of time, such as 30 days. The time limit protects the business against fluctuations in the prices of materials and labor and helps make sure that products listed in the quote will still be available. Featuring the time limit in a prominent position in the quote can also encourage the customer to make decisions and respond more quickly.

3. Add the Client Information

Personalize the quote with the customer’s information. This includes the customer’s name and/or company name, address, account number, and contact person, together with the contact’s email address and phone number. Supplying this basic information may seem perfunctory, but it’s important to check its accuracy. If you misspell a customer’s name or mistype a phone number, the customer is likely to lose trust in the accuracy of the rest of the quote.

4. Add Billing and Shipping Information

Accurate billing and shipping information helps ensure that the project will go smoothly and that you’ll get paid promptly. Be aware that if you’re shipping physical goods to the client, the receiving address and contact person may differ from the buyer who receives the quote. Billing information should include the address and contact information for the customer department responsible for handling payments, as well as any specific information the customer uses to reference the transaction. This section of the quote may also specify terms, such as the payment methods you accept, the payment time frame, and specific payment instructions.

5. Generate an Itemized List of Services or Products

This is probably the most important and detailed part of the quote. Each line item should include a description of a product or service to be supplied, the quantity, unit price, and total price. You may want to break down the proposal into sections, depending on how your business works. The sections may correspond to project stages or different elements of an overall project. For example, a plumbing company quoting for a home remodeling project might provide separate totals for the kitchen and each bathroom. Some companies also separate out material costs from labor costs.

Some proposals include a combination of fixed and variable prices. For example, a web designer might provide a fixed price for website development based on a customer specification, plus an hourly rate for adding any extra features and for ongoing maintenance.

6. Add Terms and Conditions

This section covers important points that may not have been addressed elsewhere, including disclaimers. Examples include:

• Conditions and disclaimers: Some variables are outside your control. For example, if you’re painting the exterior of someone’s house, you may not be able to start work if it rains on your promised start date, or if the siding needs repair. Such variables should be noted clearly and precisely.
• Warranties: List any warranties that you provide.
• Payment terms: If they’re not covered in the billing section, define them here. Do you want to be paid within 30 days? Do you require a deposit? What payment methods do you accept? Do you charge interest on unpaid balances?
• Additional work: Provide preemptive guidance for how you handle change orders and any other additional work, such as your hourly rate or preference for a separate quote.

7. List Additional Details and Optional Notes

This is where you can add information that’s not already covered in the quote, such as additional information about your business. Examples include the expected completion date, any special discounts that have been applied, information about additional services your company offers, and customer references. You may also want to thank your potential customer for having the opportunity to quote, and add that you’re looking forward to working with them.

8. Calculate Your Subtotal, Tax, and Grand Total

At the end of the quote, add any applicable taxes, discounts, or ancillary charges to the previously listed prices and calculate the resulting grand total price.

Below the entry for the grand total is where the quote should include a call to action that tells the customer how to respond. This can take several forms, depending on how your business works and the technology you use. For example, you might simply provide a space where the customer can sign to accept the terms, along with a request to return the signed document. If appropriate, you can inject urgency with phrases, such as “Act now to secure these prices/discounts/terms.” Alternatively, if you’re using an application that automates the quoting process, you can ask the customer to digitally accept the quote with just a few clicks.

Detailed Quotes in a Single Click

In a fast-paced business environment, generating quotes quickly and accurately is essential. Relying on manual quote creation can be time-consuming, inefficient, and error-prone, especially when you have multiple product offerings with many potential configurations and options. NetSuite’s CPQ solution helps accelerate and automate the configure, price, and quote process, increasing accuracy and efficiency while shortening the sales cycle.

NetSuite CPQ is designed to help sales reps quote properly configured products and services quickly and easily. Because it’s integrated with NetSuite’s enterprise resource planning, customer relationship management, and ecommerce solutions, NetSuite CPQ can directly access accurate, up-to-date customer and product information for inclusion in each quote. Reps can even provide 3D product images so customers can clearly see what they’re being offered. Intuitive pricing and discounting features help reps quote accurate prices while maximizing profit margins. Customizable business logic helps produce error-free product configurations, saving time and money by limiting the need for quote checking and rework. Once a quote has been accepted, NetSuite CPQ can help automate product delivery by creating the bill of materials, steps, and routing instructions required to complete the order.

Precise, professional business quotes play an essential role in business success. They can facilitate winning new clients and enhance customer relationships, while helping to maintain the business’s profitability. But manually generating quotes can be time-consuming and error-prone, creating risks for any business. That helps make a strong business case for technology that automates the process and is integrated with other business applications to help companies generate quotes faster, more accurately, and with less effort.

Business Quotes FAQs

What’s the difference between a quote and an invoice?

A quote is an offer to provide goods or services at a specified price, in accordance with predefined terms. It’s issued before the items have been provided and requires customer acceptance to go into effect. In contrast, an invoice is a request for payment after goods or services have been delivered.

What’s the difference between a quote and an estimate?

The terms “quote” and “estimate” are sometimes used interchangeably, but there are key differences between them. A quote provides precise product configurations and pricing, and may be legally binding once it has been accepted. In contrast, an estimate provides an approximate idea of pricing and product configurations that may change later.

How do you request a business quote?

Steps involved in requesting a sales quote include defining your requirements and identifying potential suppliers. Provide those suppliers with as much detail as possible about what you need and when you need it. Then respond to any questions that suppliers want answered so they can create a quote for products and services that meets your needs.

How do you decline or deny a business quote?

Technically, you may not need to take any action to decline a business quote. But, to be polite and maintain a good relationship with a supplier, you may want to respond promptly to their quote, clearly and definitively stating that you do not wish to proceed. If you like, you can provide a brief explanation and mention that you would be willing to work with the supplier in the future.