Estimate Sample
The document you give a customer before the work starts. It is an approximation and not a commitment, which is exactly why the assumptions behind the number belong on it.
- Materials and labour broken out, so the customer can see where the number comes from
- The assumptions and the validity period written in, not left implied
- Drafted by experienced lawyers for the work you actually quote for
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What a job estimate is
A document given to a customer before the work, telling them what the service is expected to cost.
A job estimate is a document given to customers by a service provider, giving an estimate of the price, the number of hours, the work to be done and the materials to be used. It gives the customer a clear idea of how much a service is expected to cost.
It is used most in trades where materials and labour hours drive the price: repair services, construction, fit-outs and project work generally. It should include the name of your company, a description of each job, and an approximate cost for each of them.
It is an approximation, and neither side is bound by it. That is the point of it, and it is why an estimate that does not state what it assumes is the one that turns into an argument when the final number is higher.
- Given by
- The service provider
- Given when
- Before the work
- While the customer is deciding
- Binding
- No
- It is an approximation
- Should show
- Each job and its cost
- Materials and hours separately
- Common in
- Trades and project work
- Followed by
- A purchase order
- Then the invoice
Why have one drafted
- Drafted around how you actually price work, not a generic form
- Assumptions and exclusions written in, so a revised figure is defensible
- A reusable template your team fills in per job
- The whole engagement handled online
- Thousands of businesses served across every state in India
What the drafting covers
- A short call about the work you quote for and how you price it
- An estimate template drafted for your business
- Materials, labour hours and each job broken out
- The assumptions, exclusions and validity period stated on the face of it
- One revision after you have read the draft
What keeps an estimate out of trouble
Say what it assumes
Access, site conditions, material prices, who supplies what. An estimate that beats its own number is one whose assumptions held; one that does not is an argument unless they were written down.
Say how long it is good for
Material prices move. A validity period is what stops a customer accepting a six-month-old figure.
Say what it excludes
Taxes, delivery, waste removal, anything found once the work is opened up. The exclusions are what a customer disputes, so name them where they can be seen.
Estimate, purchase order, invoice
Three documents, one sale, and they run in that order. Read across, this is the sequence a job actually passes through.
| Attribute | Estimate | Purchase order | Final invoice |
|---|---|---|---|
| Who, and when | |||
| The sellerThe service provider, setting out what the work is expected to cost before anyone has committed to it. | The buyerThe buyer, and this is the one people get backwards. A purchase order is the buyer’s document, raised to authorise the spend inside their own organisation as much as to tell the seller to go ahead. | The sellerIssued once the order or the project is complete and the money is due. | |
| Before agreementWhile the buyer is still deciding. It is what they compare against a competitor’s number. | At the go-aheadThe first official offer of the transaction: types, quantities and agreed prices, from the buyer to the seller. | At the endThe last invoice on a job, after any advances and part-payments, showing the total still owed. | |
| What it commits you to | |||
| NoAn approximation of price, hours and materials. Neither side is committed by it, which is why the assumptions behind the figure belong on the document. | Once acceptedIt is an offer. When the seller accepts it, by confirming it or by starting the work, it becomes a contract on the terms it carries. | It is a demandIt does not create the obligation; it calls in one that already exists under the order or the contract behind it. | |
| The workingsYour company name, a description of each job, and an approximate cost for each, with materials and labour hours shown separately where they drive the number. | A PO numberThe items and quantities, the agreed prices, the date they are needed by, and a purchase order number the seller must quote back on the invoice so the two can be matched. | The amount dueWhat was supplied, what has already been paid, what remains, and the date by which it has to be paid. | |
| Quoting workTrades where materials and labour hours drive the price: repairs, construction, fit-outs, and project work generally. | Controlling spendBuying from outside suppliers, where the organisation needs a record of who authorised the purchase before the money left. | Getting paidClosing a project or an order, and starting the clock on the payment terms. | |
| Next step | Get started | Know more | Know more |
Swipe the table sideways, Estimate stays in view. Open any attribute to read the detail behind all 3 answers.
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Is an estimate binding?
No. It is an approximation of price, hours and materials, and neither side is committed by it.
That is why the assumptions behind the figure belong on the document. Without them, a higher final number looks like a change of mind rather than a change of circumstances.
What is the difference between an estimate and a quotation?
In ordinary use, an estimate is an approximation and a quotation is a fixed price the supplier offers to stand by. A quotation the customer accepts can become a contract; an estimate does not.
If what you actually want is a fixed price, say so on the call: it is a different document and it should not be called an estimate.
What should it include?
At a minimum:
- The name of your company and the customer’s
- A description of each job to be done
- An approximate cost for each of them
- Materials and labour hours, where they drive the price
- What the figure assumes, what it excludes, and how long it is valid for
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