What Is a Sales Quotation? Definition, Format, and Example

Eric DawsonByEric Dawson Business

When asking “what is a sales quotation,” the answer is a seller’s formal offer to a prospective buyer, setting out proposed products or services, quantities, prices, and sale terms. Also called a sales quote or price quote, it normally comes before a sales order or invoice and gives the buyer a defined offer to accept, revise, or decline.

A usable quotation includes seller and customer details, a quotation number, issue and expiry dates, itemized pricing, taxes, delivery terms, payment terms, and a clear acceptance method. Its legal effect depends on the wording, the parties’ conduct, and applicable law, so acceptance should not be treated as having the same contractual outcome in every sale.

What Is a Sales Quotation?

Its commercial purpose is to give the buyer a defined offer to consider, while helping the seller present its products or services professionally and competitively.

Quotations may follow a customer inquiry or a request for quotation, often shortened to RFQ. Sellers then prepare pricing and terms using their cost structures and margins. Negotiated offers commonly include custom prices or conditions that reflect discussions with the buyer. Rather than communicating a price alone, the document brings the proposed goods or services and the conditions of the sale together for the customer’s review.

Businesses use sales quotations in both business-to-business and business-to-consumer transactions. Depending on the proposed sale, the offer can include taxes, delivery arrangements, payment terms, and a validity period alongside itemized pricing. Customer needs should shape the content, including any special conditions. For a software subscription sale, for example, a quote typically includes a description, price, quantity, and delivery date, with additional terms where they apply to the offer.

Understanding quotation versus invoice starts with each document’s role in the sales process. While the quotation presents the proposed sale, a sales order confirms what the seller will fulfill, and an invoice is the bill. Odoo describes a typical sequence as quotation, sales order, delivery where applicable, invoice, and payment. Acceptance creates the sales order in that workflow, moving the proposal into a confirmed sale.

Buyers can accept an offer, request changes, or decline it. Following up helps the seller check that the customer received and understood the quotation. Acceptance requires separate legal consideration. Treating every accepted quote as having an identical contractual effect would overlook those conditions, even when the commercial workflow appears straightforward.

Sales Quotation Format and Essential Details

A practical sales quotation format includes document identification, seller and customer details, itemized pricing, charges, currency, delivery arrangements, payment terms, and an expiry date. Terms, exclusions, and a clear acceptance method complete the offer. Organize these details so the buyer can review the proposed purchase, understand the total cost, and see the conditions attached to it. Keep the document concise while retaining the information needed to assess the offer.

Begin with the quotation number, issue date, expiry date, and revision, keeping the current version clearly identifiable. Include the seller’s and customer’s legal names and contact details alongside that identifying information. Together, these fields establish who the quotation concerns and provide a reference for tracking it. Consistent formatting and a company logo can support a recognizable presentation, while a reusable sales quotation template can help prepare personalized quotes more quickly.

Present products or services as separate line items, each with a description, quantity, unit, and unit price. Descriptions should reflect the customer’s needs and the proposed offering rather than relying on pricing alone to explain the purchase. Show discounts, taxes, shipping, and other charges, followed by the total amount and currency. Pricing should use accurate data and reflect any custom prices or terms agreed during buyer-seller negotiations.

Specify the delivery location, lead time, and fulfillment assumptions relevant to the proposed sale. Payment details should cover the schedule, credit terms, and accepted payment methods. Both areas deserve clear treatment: delivery information describes the proposed fulfillment arrangements, while payment terms explain the financial conditions attached to the quoted price. For a quotation tailored to a particular customer, keep these details consistent with the negotiated offer rather than treating them as generic template text.

State the quotation’s validity period through a visible expiry date, alongside any terms or exclusions that qualify the offer. Prices may change after that period, so the expiry belongs with the quotation’s essential details.

Finish by checking that the quotation remains concise, well formatted, and tailored to the buyer’s needs. Review the pricing breakdown, customer information, delivery assumptions, and payment conditions before sending the controlled version. Make the quotation number, revision, and expiry visible in that version. Templates can speed preparation, but the finished document should still carry the particular customer’s products or services, pricing, terms, and acceptance instructions.

Quotation Versus Invoice and Sales Order

Timing separates their roles: the quotation normally comes before the sales order or invoice. Comparing quotation versus invoice therefore means distinguishing the proposed sale from the billing stage, rather than treating both documents as interchangeable statements of a price.

Within that workflow, the sales order confirms the sale before fulfillment and billing. An invoice can then be issued from the sales order or the products or services delivered. Each document serves a different purpose as the sale progresses.

Comparison Point Sales Quotation Sales Order Invoice
Purpose Presents a defined commercial offer. Confirms the sale and what the seller will fulfill. Provides the final bill.
Typical timing Before a sales order or invoice. After quotation acceptance in Odoo’s workflow. After the sales order or delivery in Odoo’s workflow.
Content focus Proposed products or services, pricing, quantities, and terms. Confirmation of the accepted sale. Billing based on the order or delivered products or services.
Process distinction Communicates the offer for the buyer to consider. Confirms the seller’s fulfillment commitment. Represents the billing stage rather than the initial offer.

Content overlaps because the quotation and invoice can concern the same products or services, but their commercial roles remain different. For a buyer reviewing these documents, that distinction separates consideration of an offer from confirmation of the sale and subsequent billing.

Terminology also needs care when comparing quotation versus estimate. Odoo describes a quotation as a document outlining estimated costs and terms for goods and services, while its workflow treats that document as a proposal awaiting acceptance. Rather than assuming the label alone guarantees a fixed price or determines contractual status, read the quotation’s actual wording and conditions.

Acceptance connects these stages, but an operational change and a legal consequence are different questions. Converting a quotation into a sales order describes how Odoo records the confirmed sale; deciding whether acceptance creates a binding agreement requires the separate legal assessment above. Sending an offer does not itself mean the transaction has reached the order, delivery, or billing stage.

A Sales Quotation Template and Pricing Example

A reusable sales quotation template pairs blank fields for the buyer and seller with a pricing breakdown, delivery details, payment terms, and an acceptance method. Hyperbots illustrates the pricing portion with 1,000 units at ₹500 each, a 10% discount, and 30-day payment terms. Keep those example values separate from the blank template so they do not become default terms for a different customer or sale.

SALES QUOTATION

Quotation number: [Quotation number]
Revision: [Revision]
Issue date: [Issue date]
Expiry date: [Expiry date]

Seller legal name: [Seller legal name]
Seller contact details: [Seller contact details]
Customer legal name: [Customer legal name]
Customer contact details: [Customer contact details]

Product or service: [Description]
Quantity: [Quantity]
Unit: [Unit]
Unit price: [Unit price]
Currency: [Currency]
Discount: [Discount]
Taxes: [Taxes]
Shipping or other charges: [Charges]
Total amount: [Total amount]

Delivery location: [Delivery location]
Lead time: [Lead time]
Fulfillment assumptions: [Fulfillment assumptions]

Payment schedule: [Payment schedule]
Credit terms: [Credit terms]
Accepted payment methods: [Payment methods]

Terms and exclusions: [Terms and exclusions]
Method of acceptance: [Acceptance method]

Use the text as a starting point, then customize it to the customer’s needs and the proposed sale. Separate line items should carry their own descriptions, quantities, units, and unit prices, rather than combining different products or services into an unexplained amount. For a quotation containing several items, repeat that portion of the template before presenting discounts, taxes, other charges, and the total. Keep these details in the buyer version.

Applying the Pricing Example

Enter 1,000 in the quantity field and ₹500 in the unit-price field to reflect Hyperbots’ illustration. Place 10% in the discount field and record the 30-day payment terms under credit terms. Leave the product description and customer details as placeholders in this reusable example, rather than assigning them invented values. Likewise, keep tax, shipping, delivery, and date fields unfilled until preparing the actual offer, using accurate information for the particular goods or services and the customer’s requirements.

Check the completed pricing fields against the product data, pricing rules, and discount structure used for the sale. Quotation software can calculate totals and apply predefined rules, while templates help prepare tailored quotations more quickly. Even with a reusable layout, the customer-facing document should reflect the particular pricing and payment arrangement being offered. Negotiated sales may call for custom prices or terms, so review those entries alongside the quantities and descriptions instead of treating the template as a finished offer.

Finish by making the completed quotation concise and easy to read, with consistent company branding and a clear acceptance method. Add the company logo if using a branded quotation template, and keep the essential commercial details visible. Before sending, review the issue date, expiry, and revision together so the buyer receives a controlled version. Follow up afterward to check that the customer received and understood the offer, and use any requested changes to prepare a revised quotation with updated details.

How to Prepare and Send a Sales Quotation

Prepare a sales quotation by confirming the customer’s needs, checking pricing data, and tailoring the proposed terms before sending a controlled version promptly. Follow up to make sure the buyer received and understood the offer.

Accuracy starts with understanding what the customer wants to buy and how the proposed sale will be fulfilled. An inquiry or request for quotation can provide the starting point, while buyer-seller discussions can shape custom pricing and terms.

  1. Confirm the buyer’s requirements. Clarify the products or services, quantities, delivery needs, and any special conditions so the proposal reflects the customer’s request.
  2. Check your pricing inputs. Use controlled product and pricing data, calculate prices with cost structures and margins in mind, and verify applicable discounts, taxes, and other charges.
  3. Tailor the commercial terms. Set out payment arrangements, delivery expectations, fulfillment assumptions, and exclusions that match the proposed sale rather than relying on unchanged template wording.
  4. Review the completed document. Make sure the acceptance method is clear.
  5. Identify the version being sent.
  6. Send the quotation promptly. Present the checked offer in a concise, well-formatted document with consistent company branding, since delayed quotations can lead to lost opportunities.
  7. Follow up with the buyer. Ask whether the quotation arrived and its pricing and terms are understood; if the customer declines, request feedback.

Before sending, review the proposal against the customer’s needs as well as its calculations. Clear formatting and essential information help present the offer professionally, while tailored content keeps the document focused on the proposed purchase. Options such as adjustable quantities and prices may also support the sales discussion.

Templates can speed up preparation without replacing those checks. Odoo supports quotation templates for sending tailored proposals more quickly. Keep the reusable structure, but customize the buyer’s details, pricing, and conditions for the particular quotation.

Automation can support the same process by capturing product data, customer information, pricing rules, and discount structures, then calculating totals and applying predefined rules. Built-in approval workflows can shorten approval time, while quote-status tracking helps teams keep offers current and aligned with company pricing policies. For complex pricing, CPQ software can guide representatives through customer requirements and automate pricing rules, supporting faster and more accurate quote creation than manual preparation.

A sales quotation needs a stated expiry because its proposed price may change after the validity period ends. Its effect requires context. Expiry and acceptance therefore address related but different questions: how long the offer remains current, and what happens when the buyer agrees.

During the stated validity period, the quotation communicates the proposed prices and terms for the buyer’s consideration. Once that period ends, sales should reconfirm price and availability before proceeding with a late acceptance. Treating an expired quotation as current could carry avoidable cost or delivery risk into fulfillment. Reconfirmation addresses those risks rather than allowing an outdated commercial offer to become the basis for fulfilling an order.

Contractual status requires similar care because a quotation can serve different functions under different wording and conditions. SAP describes its quotation process as enabling a legally binding offer for goods or services, subject to fixed conditions. DealHub describes a quote as typically not binding like a contract until signed. Neither description should become a blanket rule for every seller, buyer, quotation, or transaction governed by applicable law.

Signing is therefore not a universal shortcut for deciding a quotation’s legal effect. Consider those factors. Wafeq describes a quotation as a formal statement rather than a binding contract, while also saying acceptance commits the customer to purchase at the stated price. Such descriptions reinforce the need to assess the particular offer rather than its label alone.

Operational confirmation and contractual effect also describe different aspects of acceptance. That system event explains the commercial process. For an expired quotation, reconfirming price and availability remains the practical step before treating the buyer’s response as acceptance of a current offer.

In 2016, Columbus, I noticed a fuel surcharge billed twice on 63 freight invoices over five months, and the carrier credited about $4,100, which was an expensive reminder that last month’s paperwork can be a poor guide. I would check a quotation’s acceptance wording and expiry date just as closely, because an old price should not quietly become a current commitment.

What Happens After a Customer Receives a Quote?

A customer’s response determines the next step. Each response gives the seller a different next step: move the sale toward fulfillment, revise the proposal around the buyer’s needs, or record why the opportunity did not proceed and ask for feedback.

Payment completes the cycle. Customers can also confirm orders through online signatures or online payment directly on sales orders in Odoo.

Requested changes take the discussion back to the proposed products, quantities, pricing, or terms. Negotiated quotes commonly include custom pricing or conditions, so the seller can tailor the proposal to the buyer’s needs. Options such as adjustable quantities and prices can support that discussion, with the revised quotation presenting the offer clearly and concisely.

Rejection should also become a recorded outcome rather than simply ending the conversation. SAP allows a reason for rejection to be entered at item level to mark the item complete, with examples including “too expensive” and “delivery date too late.” Those reasons preserve information for sales-opportunity analysis. Asking the prospective customer for feedback can help explain the decision.

Partial ordering has its own tracking implications in SAP. An item receives “Completed” status only when its full quoted quantity has been copied to a subsequent order or orders. Copying only part of that quantity leaves the item “Partially Referenced,” allowing further orders until the total quantity has been referenced.

Rather than treating every unanswered offer as a rejection, use that contact to discuss the proposal and any requested adjustments. If the buyer decides not to proceed, ask for feedback and record the stated reason.

This guide does not give jurisdiction-specific legal advice; the wording and circumstances of each acceptance still matter.

Frequently Asked Questions

What Details Should a Sales Quotation Include?

A sales quotation should include its number, issue and expiry dates, seller and customer legal names and contact details, and itemized descriptions, quantities, units, and unit prices. Pricing should show discounts, taxes, shipping or other charges, the total amount, and the currency. Delivery details, payment terms, exclusions, and a clear acceptance method should also appear.

How Does a Sales Quotation Differ from an Invoice?

In practice, a sales quotation presents the seller’s proposed products or services, prices, and terms before the sale proceeds. An invoice is the final bill rather than the initial offer. In Odoo’s typical workflow, the quotation comes before the sales order, delivery where applicable, invoicing, and payment.

Is a Sales Quotation Legally Binding?

Whether acceptance creates a binding agreement depends on the quotation’s wording, the parties’ conduct, and applicable law. Fixed conditions and the way the buyer accepts the offer can affect its legal status, so a quotation should not automatically be treated as either binding or nonbinding.

How Long Is a Sales Quotation Valid?

A sales quotation is typically valid for the period stated in the document. After that period expires, the price may change. Sellers should make the expiry date visible alongside the quotation number and revision.

What Happens if a Customer Accepts an Expired Quotation?

The seller should reconfirm price and availability when a customer accepts after the stated expiry date. Treating the expired version as current could introduce avoidable cost or delivery risk into fulfillment.

Can a Customer Request Changes to a Sales Quotation?

A customer can request changes rather than accept or decline the quotation. Negotiation between buyer and seller commonly results in custom pricing or terms. Any revised quotation should clearly display its quotation number, revision, and expiry.

Clear sales quotations give buyers a defined offer: what is being proposed, how much it costs, and which terms apply. Include complete pricing, delivery and payment details, an expiry date, and a clear way to accept. Keep the current version identifiable, and reconfirm price and availability if acceptance arrives after expiry. Following up helps ensure the buyer received and understood the proposal, while feedback can help explain why a quote was not accepted.

References

Sources read in September 2026.

Eric Dawson

I'm Eric Dawson, and I write The Money Watch from north Columbus, Ohio. Most of what I cover comes from my own life: renting, a 2014 Honda Fit, parking, computers, food and the bills behind all of it. I spent four years in an apartment-property office and eleven on a distributor's operations desk, reading leases and invoices. Where you need real information, I research the maker's or agency's own page and independent sources and report what they publish. I don't give tax, investment, legal or medical advice.