How to write a quotation: what to include, pricing and terms

A quotation is a document that tells a client what you will do, what it will cost and for how long that price stands. A good one lists the work in clear line items with quantities and prices, adds tax correctly, states what is and is not included, sets a validity date and payment terms, and makes it easy to say yes. The quotation generator lays all of that out on a printable sheet, and this guide explains what each part is for. It is general information; contract and tax rules depend on where you and your client are.

Quotation vs estimate

The words are often used loosely, but in common business usage a quotation is a firm price for a defined piece of work, while an estimate is an informed guess that may change as the work unfolds. If you cannot price the job firmly, call the document an estimate, say what could change the price, and give a range or a cap. In contract law, a price list or advert is generally an invitation to treat rather than an offer, but a detailed quotation that a client accepts can form a binding agreement. If the stakes are high, put the full terms in a written contract rather than relying on a short quote.

What to include

• Your details and the client's: names, business names, addresses and contact details.
• A quote number and date, so both sides can refer to it.
• The scope: line items describing the work or goods, with quantities and unit prices.
• Exclusions and assumptions: what is not included, and what you are assuming (number of revisions, materials supplied by the client, access to the site).
• Subtotal, tax and total, with the tax rate shown.
• Validity: the date the price expires.
• Payment terms: deposit, stages and when the balance is due.
• Timeline, if dates matter to the client.

Pricing the line items

Break the work into items the client can recognise, each with a quantity and a unit price. The generator's sample quote shows the pattern: design work, 1 × 1,200 = 1,200, and development, 10 hours × 95 = 950, giving a subtotal of 2,150. At a 20% tax rate the tax is 430 and the total 2,580. Itemising helps both sides: the client sees where the money goes, and if they want to cut the cost you can discuss removing items rather than discounting your rate. To set the hourly or day rate in the first place, the freelance rate calculator and How to set a freelance rate that covers tax, costs and time off work backwards from your costs and target income. Check that the price leaves the margin you intend; the margin calculator does that sum.

Tax deserves care. If you are registered for VAT or a similar tax, show the rate and amount; if you are not, do not add it. Business clients usually think in prices before tax, consumers in prices including it, so make clear which you are quoting. The VAT calculator handles the arithmetic in both directions.

Validity, deposits and terms

A validity period protects you from a client accepting a months-old price after your costs have risen; 30 days is a common default and the generator uses it unless you change it, printing the expiry date on the sheet. A deposit protects you against cancellation and funds materials. The sample terms ask for 50% on acceptance and the balance on delivery, which on the example total means 1,290 up front. Larger jobs often use stage payments tied to milestones. State when invoices are due, such as within 14 or 30 days, and what happens if the scope changes: additional work quoted separately before it starts.

From acceptance to invoice

Ask the client to accept in writing: a signature on the quote, a reply email or a purchase order that refers to the quote number. Keep a copy. When the work is done, or at each stage, send an invoice that references the quote and uses the same line items; the invoice generator carries the same structure, and How to write an invoice that gets paid lists what an invoice must contain. The quotation generator saves your draft in the browser and its new-quote button increments the number, so each quote has a unique reference.

Common mistakes

• Vague scope, such as website design with no pages or revisions specified, which invites disputes.
• No exclusions, so the client assumes everything is included.
• Forgetting tax, or adding it when you are not registered.
• No expiry date, leaving an old price open indefinitely.
• Starting work before acceptance, then having nothing in writing if the client disputes the price.

For larger pitches that need goals, timeline and next steps, the proposal generator wraps the pricing in a fuller document.