What is a quotation in business?
A plain-language guide to quotations in South African business: what one is, how it differs from an estimate and an invoice, what a valid quote must include, and how to compare quotes fairly before you commit.
A quotation is a formal offer: exactly what will be supplied, at what ZAR amount, and for how long that price holds. Once you accept, the supplier is bound to it.
Under South African law the quotation is the offer and your acceptance forms the contract. That is why the scope and exclusions matter as much as the number.
Materials and labour costs change, so quotes carry a validity period, typically 7 to 30 days. Accepting after it lapses lets the supplier revise the price.
Quotation, estimate or invoice — what's the difference?
South African businesses use these terms loosely, but they mean different things legally. Knowing which one you have tells you how firm the price is.
| Document | When it's used | Is the price binding? |
|---|---|---|
| Estimate | An early approximation before the scope is fixed | No — the final cost can change |
| Quotation | A firm, itemised offer after the scope is agreed | Yes — once you accept it |
| Invoice | The request for payment after the work or delivery | It bills the agreed price |
What a valid quotation should include
Not every quote is equally enforceable. A professional South African quotation makes the offer clear enough that there is no room to argue later.
What is supplied, how much, and what it costs each — not just one lump sum.
The full amount including VAT, with the supplier's VAT number shown on VAT-registered quotes.
How long the price holds, typically 7 to 30 days in South Africa.
What the price does not cover, so there are no surprise add-ons on invoice day.
Deposit, payment on completion, or payment terms, agreed before work starts.
The business name, contact details and, where relevant, registration or VAT number.
Two real quotation examples
The same shape applies whether you are buying services or goods. Here is what good and vague quotations look like.
A proper quotation
- Install 6 x 550W solar panels, 5 kW hybrid inverter and 5 kWh battery
- Supply and fit aluminium mounting, cabling and DB board work
- Electrical Certificate of Compliance and municipal registration included
- Price valid for 30 days; payment 20% deposit, balance on completion
- Geyser element replacement
- Asbestos roof removal
A complete, enforceable offer. You can compare it fairly with other quotes on the same scope.
A vague quotation
- Solar system installation
- Includes parts and labour
- Estimated completion in a few weeks
- Anything not listed
- Permits or certificates
Too open to enforce. The supplier can raise the price later because the scope and validity were never fixed.
Quotation questions
What is a quotation in business?
A quotation (or quote) is a written promise from a supplier to provide a specific product or service at a stated price, within a stated validity period. In South African business practice it is an offer: once you accept it, the supplier is legally bound to do the work for that price, and you are bound to pay it.
What is the difference between a quotation and an estimate?
An estimate is an approximate, non-binding indication of what the work might cost. A quotation is a firm, itemised offer that binds the supplier to the stated price once accepted. If an estimate overruns, the supplier can ask for more; if a quotation overruns, they generally cannot.
What is the difference between a quotation and an invoice?
A quotation comes before the work and sets out the price you agree to pay. An invoice comes after the work (or delivery) and is the formal request for payment of that agreed amount. A valid VAT invoice in South Africa must also carry the supplier's VAT number, an invoice number and a tax invoice statement.
What must a valid quotation include in South Africa?
A proper quotation should itemise the work or goods, specify quantities and unit prices, state the total in ZAR, show how long the quote stays valid, list what is excluded, and set out payment terms and the supplier's VAT number where relevant. Keep the written copy so you can hold the supplier to it.
Is a quotation legally binding in South Africa?
Yes. Under South African contract law, a quotation is an offer. If you accept it within its validity period, a binding agreement is formed. To be safe, accept in writing, confirm the scope in writing, and keep a copy of both the quotation and your acceptance.
Why should I compare multiple quotations?
Suppliers price differently on materials, labour, travel and whether the work is covered properly. Comparing at least three written quotations on the same scope is the fastest way to see what is fair in your area, and it protects you from paying over the odds.
This page is a general explanation for South African consumers and does not constitute legal or tax advice. Confirm the specific terms of any quotation with the supplier and, for significant contracts, with a qualified professional.