Quotation Format India — Free Template & How to Write a Business Quotation
What is a Quotation?
In business, a quotation (often referred to as a quote or price estimate) is a document that a supplier sends to a potential client detailing the proposed prices for specific goods or services. It is the first step in the sales process, allowing the buyer to understand the costs involved before deciding to proceed.
Sending a professional, well-formatted quotation establishes trust and sets clear expectations. If the buyer accepts the quotation, they typically issue a Purchase Order, after which you deliver the goods/services and issue a final Tax Invoice.
Quotation vs. Proforma Invoice vs. Tax Invoice
It is easy to confuse these documents. Here is how they differ in the business lifecycle:
| Feature | Quotation | Proforma Invoice | Tax Invoice |
|---|---|---|---|
| Stage of Sale | Initial inquiry / Proposal | Terms agreed, pending delivery/payment | Goods/services delivered |
| Purpose | Provide estimated pricing | Request advance payment or customs clearance | Demand final payment & legal tax record |
| Commitment | Non-binding offer | Commitment to supply at stated prices | Legally binding debt |
| Accounting Impact | None | None | Recorded in accounts, GST payable |
Essential Elements of a Professional Quotation
To be effective and professional, your quotation should include:
- Header: Clearly marked as "QUOTATION" or "ESTIMATE".
- Your Details: Business name, logo, contact info, and GSTIN (if applicable).
- Client Details: Name and contact information of the prospective buyer.
- Reference Numbers: A unique Quotation Number and the Date of issue.
- Itemised Breakdown: Clear description of goods/services, quantities, unit prices, and total amounts.
- Taxes: Indicate whether the prices are inclusive or exclusive of GST, and show the estimated tax amount.
- Terms and Conditions: Crucial details regarding payment terms, delivery timelines, and warranties.
- Validity Date: VERY IMPORTANT. Prices fluctuate, so state "Valid until [Date]" or "Valid for 30 days".
How to Create a Quotation Using BillBanao
You don't need specialized software to create quotes. You can use the BillBanao Proforma Invoice Maker to generate beautiful quotations in seconds:
- Visit the Proforma Invoice Maker.
- In the document title field, change "Proforma Invoice" to "QUOTATION".
- Fill in your business and client details.
- Add your line items and estimated prices.
- In the "Notes / Terms" section, add your validity clause (e.g., "This quotation is valid for 30 days from the date of issue.").
- Download the PDF and send it to your client!
Frequently Asked Questions
What is a quotation in business?
A quotation (or quote) is a formal document given by a seller to a potential buyer, stating the estimated price for goods or services before the buyer commits to the purchase. It acts as a formal offer.
What is the difference between a quotation and a proforma invoice?
A quotation is an initial estimate or offer provided during the negotiation phase. A proforma invoice is a more formal, preliminary bill sent when the terms are largely agreed upon, often used to request advance payment before final delivery.
Is a quotation legally binding in India?
A quotation itself is an 'invitation to treat' or an offer. It only becomes a legally binding contract when the buyer formally accepts it (e.g., by issuing a Purchase Order). It is highly recommended to include an expiration date on your quotes to protect against future price changes.