What is a quotation in business?
A business quotation is a formal document sent by a supplier to a potential customer that specifies the price for goods or services.
Types of business quotations
- Fixed price quote — the price stated is the final price
- Estimate — an approximate price that may vary
- Bid — used in competitive tendering
- Proforma invoice — used in international trade before goods are shipped
When is a quotation legally binding?
A quote is not binding until the client formally accepts it. Once accepted in writing, it forms the basis of a contract.