Table of Content

Sales Quote (Quotation)

A sales quote, also called a quotation, is a written offer that tells a prospective customer what a business will provide, what it will cost and which terms apply.

A quote is normally prepared before work starts or goods are supplied. It gives the customer enough detail to decide whether to accept the offer, request a change or decline it.

In Australia, the Government’s prepare quotes guidance says a clear written quote should identify the parties, describe the work, itemise costs, show GST where applicable, state payment and timing terms, include an expiry date and provide a way to accept. It also warns that an accepted quote can become a legally binding contract.

A quote is not an invoice. The quote proposes a sale; the invoice asks for payment after the agreed trigger. It is also different from a purchase order, which the buyer may issue to authorise the purchase.

Where Sales Quotes Appear

You will usually see sales quotes in:

  • customer enquiries and sales pipelines
  • service jobs, projects and trade work
  • itemised product or equipment proposals
  • scope, price and delivery negotiations
  • quote approval and quote-to-invoice workflows
  • customer purchase-order requests
  • job costing and expected-margin reviews

Businesses may use the words quote, quotation, proposal or estimate differently. The document’s actual wording and circumstances matter more than its label, especially when deciding whether the customer has accepted a binding offer.

How A Sales Quote Works In Practice

A practical quote workflow is:

  1. Confirm what the customer needs and what is outside scope.
  2. Calculate labour, materials, subcontractor costs, overheads and a suitable margin.
  3. State quantities, prices, GST treatment, timing and payment terms.
  4. Add assumptions, exclusions, variation rules and an expiry date.
  5. Send the quote and keep a copy of the version the customer received.
  6. Record acceptance and any agreed changes.
  7. Convert the accepted details into the job, order or invoice without retyping them.

The Australian Government’s contract guidance recommends stating how much, when and how the customer will pay. If a quote is intended to form part of the contract, its scope and payment details should agree with the final contract and invoice.

Simple Example

A landscaping business quotes:

  • garden preparation and planting: $2,200
  • irrigation materials and installation: $1,100
  • subtotal excluding GST: $3,300
  • GST: $330
  • total: $3,630
  • 30% deposit on acceptance and the balance on completion
  • work to begin within three weeks
  • quote valid for 30 days

The customer accepts the quote in writing. The business records the accepted version, raises the deposit invoice and uses the same item descriptions and prices when it prepares the final invoice.

If the customer later asks for extra paving, the business should document that variation instead of quietly adding it to the final bill.

Quote Versus Estimate

A quote usually offers a defined price for a defined scope. An estimate is commonly a best assessment of likely cost when the final amount cannot yet be known.

That distinction is useful, but the document should still explain whether the price is fixed, which assumptions it relies on and how changes will be approved. Calling a firm offer an estimate does not automatically remove contractual risk.

A pro forma invoice is different again. It presents expected transaction details in an invoice-like format, often for pre-shipment, approval or customs purposes, but it is not the final accounting invoice.

Why Sales Quotes Matter

A good quote protects both sides from avoidable surprises. It helps the customer compare the offer and helps the business control scope, pricing and timing before committing resources.

Clear quotes can also improve:

  • conversion from enquiry to approved work
  • gross margin by making costs and exclusions visible
  • cash flow through deposits and milestone payments
  • handover from sales to delivery
  • invoice accuracy
  • evidence when a customer disputes price or scope

Common problems include vague descriptions, missing GST treatment, expired prices, hidden exclusions, inconsistent versions and invoices that do not match what was accepted.

Regional Variations

Quotation practices and contract rules vary by country, industry and transaction type. Consumer guarantees, cooling-off rules, unfair contract terms, licensing requirements and mandatory notices may also affect the agreement.

For higher-value, regulated or unusual work, use the contract and disclosure requirements that apply in the relevant jurisdiction and seek qualified legal advice where needed.

How Gimbla Can Help

Gimbla can keep customers, items, prices, tax settings and invoices in one accounting workflow. Reusing approved details reduces re-keying and makes it easier to compare the final invoice with what the customer accepted.

For practical writing and approval tips, see How To Get Quotes Approved Faster.

Helpful Gimbla Guides

In Short

A sales quote is a pre-sale offer that defines scope, price, timing and terms. Keep the accepted version clear and connected to the final job and invoice so the customer receives what was agreed.