Glossary
What is a quotation?
What a quotation is, what it should show for an Indian buyer, and what happens to it once the customer says yes.
Updated
In short
A quotation is a priced offer sent before a sale, showing items, rates, GST, total and an expiry date. SimpleERP quotations expire on their date and convert to a sales order or invoice without retyping.
A quotation is a priced offer a seller gives a buyer before a sale: the items or services, quantities, rates, GST, total and how long the prices hold. If the buyer accepts before it expires, the sale goes ahead on those terms. It is not a bill and records nothing in the books. It is also called a quote or an estimate.
Quotation: a worked example
Ravi Stores in Coimbatore asks Lakshmi Steel Furnitures for prices on racks and chairs. Both are in Tamil Nadu, so GST at 18% splits into CGST and SGST.
| Item | Qty | Rate | Amount |
|---|---|---|---|
| Steel rack 4 shelf (HSN 9403) | 20 | ₹4,990 | ₹99,800 |
| Office chair mesh (HSN 9401) | 10 | ₹6,450 | ₹64,500 |
| Taxable value | ₹1,64,300 | ||
| CGST 9% | ₹14,787 | ||
| SGST 9% | ₹14,787 | ||
| Total | ₹1,93,874 |
FAQ
Questions, answered
What is the difference between a quotation and an invoice?
A quotation is an offer made before the sale; the customer can accept, negotiate or decline. An invoice is the bill raised after the goods or services are supplied. Only the tax invoice records the sale, the GST and the amount owed.
Should a quotation include GST?
Yes. Show the taxable value, the GST rate and amount, and the total, so the buyer compares the real price. State whether it will be CGST and SGST or IGST, which depends on where the goods go. A quotation that hides GST invites an argument later.
How long should a quotation be valid?
Long enough for the buyer to decide, short enough that your costs do not move. Fifteen to thirty days is common for goods whose input prices change, such as steel. SimpleERP defaults the expiry to 30 days and you can change it on each quotation.
Can I change a quotation after sending it?
Send a revised quotation rather than editing the old one, so both sides know which prices were offered when. In SimpleERP a sent quotation is frozen and Revise copies it into a new draft for the changes.
Related
Keep reading
Quotation format
A quotation format with GST shown line by line, as a free Excel, Word and PDF download.
Read moreSales order
The seller's record of a confirmed customer order, between the quotation and the tax invoice.
Read moreCRM
Leads, a deal pipeline, today's follow-ups and conversion to customer and quotation.
Read more
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