Quotation vs. Estimate: Which Should You Send?

What is the Difference?

When onboarding a new client, one of the first documents you will likely send is either a quotation or an estimate.

While they serve a similar purpose—telling the client how much a project will cost—they are legally and functionally distinct. Choosing the wrong one can lead to lost money or broken client trust.

Here is the simple breakdown:

• A Quotation: A fixed, binding price. If the client accepts it, you must deliver the work for that exact amount.
• An Estimate: A rough, educated guess based on available information. It is expected to change as the project evolves.

When to Use a Quotation

If a project has clearly defined parameters and the risk of unforeseen costs is very low, use a quotation.

For example, if you run a printing business and a client asks for 500 business cards on standard stock, your costs are completely predictable. You should send a binding quote.

To protect yourself when sending fixed prices, you should:

• Clearly state the validity period (e.g., "Valid for 30 days")
• Detail exactly what is included (and what is not included)
• Include terms and conditions

If you need to send a binding price, use our free online quotation template to ensure it looks professional and includes all necessary legal fields.

When to Use an Estimate

If a project has unknown variables and the scope of work might change, you must use an estimate.

For example, if you are a web developer hired to fix a bug in a complex legacy codebase, it might take 2 hours, or it might uncover deeper issues that take 20 hours. You should provide an initial estimate, noting clearly that costs are subject to change.

When providing an educated guess:

• Clearly label the document "Estimate" (never label it a quote)
• Break down your anticipated hourly rate and estimated hours
• Include a disclaimer that the final invoice may vary by 10-20% based on project realities

To build these documents quickly, try a reliable invoice maker and estimate app to keep your project finances organized from start to finish.

Key Takeaways

Never commit to a fixed quotation if the project scope is murky. Conversely, clients love the certainty of a fixed quotation if you are confident in your pricing model.

Whichever you choose, ensure the document is clear, branded, and professional.