Sales quote Components

By Annapoorna

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Updated on: Feb 9th, 2022

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3 min read

A sales quote allows a potential buyer to evaluate the expenses associated with the work they want to get done.

What is a sales quote?

A sales quote is a formal document sent by a seller to a customer to provide products and services at a specified price. When a consumer requests a quotation, it indicates that they are serious about doing business with you. Sales quotes, also known as quotations, are used to inform a potential consumer about the cost of products or services before they commit to a purchase.

The firm generates a sales quote based on the information provided by the potential client about the factors that influence the product’s pricing.

Uses of a sales quote

Sales quotes help in the establishment of a base price for goods and services. This can help the customers decide if they have the budget for a project and choose the estimate that best meets their requirements. Sales quote also enables the company issuing the quote to plan for incoming orders. Following are some of the other uses of sales quotes.

  •  Helps create new customer relations
  •  Shortens sales cycles
  •   Pricing errors are unlikely
  •    Increases trust
  •    Detects price changes

Components of a sales quote

1. Introduction

The introductory part allows you to make a quick connection with your potential consumers. Mention any past interactions to set the tone for the quotation.

2. Company details

List your business and contact information (address, email, phone number, etc.) as well as the person for whom the quotation is intended.

3. Price and time frame

Give a total pricing amount as well as a breakdown of goods and labour expenditures. If relevant, you should also specify time frames for the delivery of products or services.

Towards the end, provide any relevant legal papers such as contracts, terms and conditions,  warranties, etc.

Format/template of a sales quote

sales quote

How is a sales quote different from a sale order?

Sales quoteSales order

A sales quote is a one-time estimate you provide to a customer that has no bearing on inventory.

A sales order is a purchase commitment that does not subtract inventory.

A sales quote is an initial offer to the customer.

A sales order confirms the customer or buyer’s request.

A sales quote will break down the price of goods and services.

With a sales order the customer confirms the established price.

It does not appear in any inventory display.

It will show up on the Inventory displays.

Closing a deal is very important for a business. A sales quote can be used to introduce your company to a prospective customer or lead, as well as to provide a quick reference to your product or service rates. Sales quotes can assist your company build confidence and prepare for future manufacturing demands.

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

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Quick Summary

A sales quote is a formal document that provides products and services at a specified price to customers. It helps in setting base prices, establishing new customer relations, shortening sales cycles, and increasing trust. Components include an introduction, company details, price breakdown, time frame, and legal documents. A sales quote differs from a sales order by not affecting inventory and being an initial offer. What is the purpose of a sales quote? How can sales quotes help in the decision-making process? Why is including legal documents essential in a sales quote?

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