Using a template to write invoices saves you a fair bit of time. While you still have to enter all of the payment information for each order on your own, sample invoices provide a ready-made design that you just have to fill in using the relevant company and customer data. But how does the perfect invoice template really look? And what should an invoice template consist of?
Companies need orders to make profit. When you create a quote, you’re reacting to customers’ requests or drawing attention to your products or services when cold calling. A written quote should meet certain standards, since it forms the basis of the business relationship between you and the customer.
Whether you decide to write quotes or not, depends mainly on the cost-benefit ratio. You can significantly improve your chances, however, by heeding these tips on the content and structure, and how to formulate a quote. A precise and well-structured quote is a professional approach and can increase the chances of the recipient accepting your offer.
Creating the perfect quote: why is it so important?
Preparing a quote belongs to marketing and acquisition and therefore to the everyday routine of many businesses and service providers. Many freelancers also write quotes for their companies. By doing this, you secure your orders and therefore also your income. A professional approach should be top priority.
You have more legal certainty if your quote is submitted to your customers in written form. You have proof that all sides have agreed, unlike with a verbal agreement. Generally, a quote should cover all the facts, services, and costs relevant to your business. This is also important because the offer is the basis of the final purchase contract between you and the buyer. The contract is completed as soon as a customer receives your quote, places an order, and you issue a confirmation of the order.
If the buyer has accepted the offer, it is legally binding – both parties (buyer and seller) can refer to the agreement stipulated in the quote. Offer and acceptance constitute two declarations of intent, which are concluded after both parties agree to the contract.
In exceptional circumstances, a quote can lose its legal binding (e.g. if the order arrives late or differs from what the customer ordered). You should always check the final version to make sure it’s correct – especially the prices as well as the shipping information.
You can, however, label certain parts of the quote as non-binding through exemption clauses (e.g. by using phrases such as 'while stocks last', 'prices are subject to change', and 'no guarantee'). Some courts, however, have labeled these exemption causes as anti-competitive or non-effective in certain contexts. Therefore, it is advisable to only use them if this isn’t the case.
Important steps before creating the quote
You communicate with the potential customer prior to writing each quote. Here, it’s much easier to discuss the conditions orally instead of writing them down. This verbal exchange also helps you to understand the customer’s needs and wishes better and visualize the customer journey up until this point.
When you exchange information with your prospective customer about the details specified in the quote, it means a contract is within reach. This is an indication that the customer is taking your offer into consideration. In order to increase your chances of finalizing a contract, now is the time to discuss any specific concerns and intentions that the customer might have: how will the customer benefit from your services? Which product or service best suits the customer’s needs? The general conditions also play an important role for you – for example, the amount of money and time the customer has. Only once you know this, can you create a suitable and attractive quote, which can convince the customer that your service is the right one.
How to write a quote
The next step is to create an overview that summarizes all important aspects of the offer. This summary makes it easier for you to find conclusive arguments that will lead to the customer placing an order. Lists also help you to structure the quote in a meaningful way. The following questions are a good guide:
- Why does the customer need your goods and/or services? For what purpose?
- What makes you stand out from the competition?
- How long can the customer use your products/services for?
- Might the customer have to face additional costs?
- Would an expiry date add a sense of urgency?
- Which kind of billing makes sense: total price, payment on an hourly basis, or when certain milestones are reached within the project?
Once the summary is complete, you can begin writing the quote.
The structure and components of a quote
Quotes should be written formally. You should definitely use your logo: it is your trademark and therefore belongs to the corporate design of your company and should be placed in a prominent position.
The usual formalities are essential when writing to customers: the quote must contain both the name of your company (with legal status and address), your first name and last name as well as the customer’s information. You should also include the quote number, date, estimated shipping date, customer number, and the contact person of your company. The place you’re sending the order to and the date are also needed.
In the heading, you can specify exactly what you’re offering. Use the correct form when addressing the customer since this shows respect and professionalism.
The text should be kept as short as possible and divided into compact paragraphs of no more than four lines. Describe and explain your services to the customer. Furthermore, a quote consists of a clear statement of what your services are and the basic information that has been agreed upon. Include the different amounts (e.g. quantity of goods, number of hours for a service) and the corresponding prices. This can be presented as a table or a list.
For the customer to be able to understand the structure of your quote better, you should break down the total price into intermediate sums e.g. the net price, price with sales tax, and the shipping costs. It is also advisable to set a time period so that you can specify how long the conditions are valid.
The actual quote should ideally be no longer than one page. However, it’s not always possible to fit all the necessary information on a single page. If you need to give your customer more details that require more space, you can send an accompanying letter explaining the rest.
Contents and formulating a quote
As a rule, you include text to show the customer the benefits of your service. Emphasize the advantages and positive aspects here since you want to convince your potential customers that their order is in the best hands.
Try to find at least one unique feature that makes your quote stand out. For goods, you could mention how good the quality of the material is, the impressive workmanship, options for custom-made products, etc. In terms of services, however, you could emphasize how well the customer is supported in their project or that customer service is easily accessible.
If the quality of your services have resulted in you receiving impressive references and/or customer comments, you can also list these (including names and, if applicable, the company and position of the respective person) in the quote. The aim of a quote, however, is not self-praise. The examples are designed to show potential customers that others have benefitted from your services.
Include powerful arguments to encourage potential customers to take advantage of your offer. In doing so, you focus on the individual needs of your customer and avoid using technical terms: the content should be understandable for the reader at all times. Don’t repeat anything as this unnecessarily lengthens the text.
Creating a quote: what content is required?
For your business relationship to have a solid base, you have to include certain content.
- Exact description of what you’re offering: designate your goods and/or services as precisely as possible so that there are no misunderstandings. If there’s a time limit, you should also mention this.
- Prices and quantity or duration of services offered: it is not always possible to specify the expected working time and the necessary production costs in advance. This is why it could make sense to arrange an hourly rate. If you give your customer a discount or other benefits (a discount will have a positive effect on how the offer performs), you should have this in writing. The same applies if any additional costs occur.
- Production and shipping time: indicate how much time the production and delivery of the offered services need. If you aren’t able to work this out in advance because the project is quite long, talk to the customer about it and come to an agreement.
- Shipping and packaging costs: when shipping goods, you should list all costs that result from this. Indicate the type of shipping here as well.
- Fees: any additional costs you incur due to traveling to meet the customer or because of overnight accommodation and meals should be stated.
- Terms of payment: it always makes sense to specify how and when the customer should pay. For work that extends over a longer period of time, you should offer the option of paying in installments.
- Reference to the general terms and conditions: if your company has general terms and conditions, you should include them in the quote. Any extra details should be mentioned in a separate letter. You are the only one who is responsible for any legal disputes that might arise between you and the customer.
- Product’s usage rights: make it clear where the order is carried out and when the customer will receive the product or service (often after payment has been received). If you still want certain rights of use for the product after the order has been completed, you need to specify this in the quote.
- Information on damaged deliveries, non-delivered products, and payment problems: sometimes complications can occur (even without personal negligence), so to make sure that you’re prepared in case the worst happens, you should have a certain clause explaining what the procedure is, which both parties then agree on.
Even if it takes a while to put together a well-structured quote, it’s worth it since you can use it as a template for further quotes. Many formalities and components can be used in every quote. So once you’ve created a successful quote, you or your employees will always have a sample copy that meets the basic content requirements. You just need to customize it accordingly.
Writing a quote: checklist
Although a quote needs to be a manageable size, there are many aspects that need to be considered in terms of content and structure. The following checklist summarizes the essentials:
- Ensure you know the wishes and general conditions the customer expects from the quote.
- Mention the benefits of what you’re offering compared to that of your competition.
- A written offer should be easy to understand and as short as possible without neglecting any important aspects.
- Address your customers personally.
- State the price with and without sales tax.
- Limit the duration of your offer.
- Check to make sure all information and notes on your company are correct and detailed.
Sending out and analyzing your quote
The time limit also applies when it comes to sending out the quote: the quicker you react to an interested customer, the higher the chances are of it paying off. Aim to send the quote out to the customer within 24 hours.
After sending it out, you should leave the recipient some time to read it through and decide if they want to go ahead with it. If you haven’t received a reply after a while, contact them again. The amount of time you decide to leave before contacting them again so as not to appear pushy or obtrusive, depends on the order, but 1 to 2 weeks is quite normal.
If your quote is rejected, you can always ask why this was the case. Usually it’s because of the price, but there could also be other reasons. Not everyone will explain the reason why, so be prepared for this. You could have your quote checked over by an independent expert (black out any sensitive information or omit it). This can provide you with valuable insights and improve any future quotes you send.