The estimate vs quotation question comes down to one thing. An estimate is an approximate figure based on what you know so far. A quotation is a fixed price you are committing to. The words are often used interchangeably in conversation, and that is exactly where the trouble starts.
Estimate vs quotation, side by side
| Estimate | Quotation | |
|---|---|---|
| The price | Approximate, may change | Fixed, subject to your terms |
| Used when | Scope is not yet clear | Scope is defined |
| Client expectation | A guide | The final number |
| Binding on acceptance | Generally not | Yes |
| Best for | Diagnostic work, repairs | Defined jobs |
Where it goes wrong
A client hears a number. Whatever you called the document, that number is what they remember. When the invoice arrives 30% higher, the fact that you wrote estimate at the top rarely settles the argument.
If you genuinely cannot price the job yet, say so in words on the document: This is an estimate based on the information available. The final price may differ once the extent of the work is confirmed. We will confirm before proceeding beyond this figure.
That last sentence is the important one. It gives you an obligation to check in, and it gives the client a guarantee they will not be surprised.
Better than an estimate
- Quote a diagnostic fee as a fixed price, then quote the actual work once you know what it is.
- Quote a range with what sits at each end.
- Quote in stages, each one fixed.
All three convert better than an estimate, because a client can accept them.
Common questions
Is an estimate legally binding?
Generally treated as an indication rather than a fixed offer, though how it is worded matters. Say clearly on the document which one you are sending.
How much can an estimate change?
There is no fixed percentage. The protection is telling the client before you exceed it, not a number in your terms.
Should I ever send an estimate?
For genuinely unknown work, yes. For anything you can scope, quote.
Fixed price, clear scope, validity date. Free to use.
Create a professional quotationDisclaimer: This content is for general information only and does not constitute legal, tax, accounting or financial advice. Always confirm important requirements with SARS, the relevant authority or a qualified professional.
