Quotation
A supplier's written offer of price and terms for specified goods or services.
What it means in business
A quotation states what is offered, the price, how long the price holds, delivery time and payment terms. A customer can accept it by placing an order. It is usually a reply to an enquiry or an RFQ.
Example
A fabricator quotes a customer for 300 brackets, valid for 15 days. The customer accepts within the period and sends a purchase order at that price. This is an illustration of normal business use rather than a quoted case study.
How to use it correctly
State the validity period and the basis of the price, such as whether tax and freight are included. Keep a numbered copy, because the order will refer to it. Revise it in writing if the customer changes the specification.
Common confusion
A quotation is an offer and not a bill: it should not be entered in the sales register or the GST return. It is also not a proforma invoice, which asks for payment against specific goods.
Related glossary terms
Written on 24 October 2026 for lamp. Confirm the current rules with the official source or an adviser before relying on it.