The term quotes, estimates, and proposal are used interchangeably in the business arena. Often there is a widespread confusion about Quotes & Estimates and some people deem both as one and same. Meaningfully different, all these terms are related to the price list with a fine line difference. Contrary to what you might think, there is a world of difference between these two terms and this article is an attempt to bring out the variance between the two.
Quotes, also known as Quick Quote, sales quotations is an exact price for a line of work that you consent with your customer before starting the work. Your quote should stipulate the monetary value or the sum of money and the type of work it covers together with the relevant costs. On the other hand, an estimate is an educated guess of what you think a product/service may cost, without committing to prices and terms and it isn’t binding. Having said that, estimates help you to determine costs and assist in clients with budgeting and are usually drafted without an in-depth understanding of the client’s requirements and are subject to change. Whereas, quotes provide a fixed price for a project subject to a particular time frame. When you are involved in a state of affair that requires you to work out a quote or estimate, it is imperative that you know your fixed and variable costs. It includes the cost-per-hour of manual labour, material costs and other charges if any and then you can calculate your quote or estimate based on what you think the line of work will involve.
Hope this piece of writing has put your confusion about Quotes and Estimates to bed. Stay tuned for more updates about B2B bidding and e-procurement essentials and keep away from pricey miscommunication.