Order / Pricing / Tender / Quotation
Standard form purchase orders are normally provided by the seller / provider of goods and services. In situations when you are placing an order through mail / fax / e-mail, please ensure that you provide all the required information completely and accurately, including but not limited to the following:
1. name of product/service,
2. product/service code or number,
3. unit price, sales tax and discount/ payment terms (if any),
4. quantity ordered,
5. pick up or delivery address,
6. required date of delivery/service,
7. payment method (enclosing cheque, transfer or by instalment).
When you have received an order, you may wish to confirm or acknowledge an order by mail or by e-mail. Some companies simply send an invoice to the customer. To add a personal touch and increase goodwill, you may wish to add a cover letter or e-mail enclosing the invoice. In particular, for first-time customers or customers with a large order, a note of appreciation could be a business starter and help to convert them into long time customers. Order confirmation or acknowledgement should contain the following items (if not already in the Sales invoice):
1. name and serial / invoice number of the product/service ordered;
2. price of the order and method of payment;
3. date and delivery date of order;
4. method of delivery or pick up location.
If a salesperson is involved, the contact details of the salesperson should be included. This would allow the customer to follow up on the order and the opportunity to sell other products to the customers. You may also wish to include your product catalogue or sales items to incentivise the customer to make additional orders which is a business plus.
In the case of other acknowledgement such as confirmation of delivery or payment, it can serve both as a courtesy message and a thank you note for the receipt of goods or payments. If the confirmation of payment is addressed to an account clerk, then only the basics information regarding the payment and the account should be included to ensure that the accounting clerk is not confused by other information.
Most companies will have a price list for a fixed range of products or services. This type of standard price list can also be used to price non-standard orders. It is a good idea to date your price list before sending it to your customers. Make sure your price list looks professional and formal. Remember, everything conveys a message about you and your company. The price list should include your company name, logos (if any), and all other contact information.
It is also useful to add a clause to the end of the price list that states that prices may change at any time. Also included in the price are the costs of shipping, packaging, or postage. Please also indicate if there are any discounts for bulk purchases.
It may not be possible for some companies to give standard prices for goods and services that are tailored for each customer. This may be because the skills, time, and materials required for each job vary based on the needs of different customers and therefore individuals would be required to request for quotation. The quotation is normally fixed and cannot be changed once it is accepted by the customer (unless there is a clear clerical error). This is the case even if the quotation is too low and would not cover the cost.
Legally speaking, a quotation is different from the pricing. Pricing is an invitation to treat, the customer would make an offer based on the price given, the provider of the goods and services may still decline or reject the offer. Whereas a quotation is an offer by the goods and services provider which if accepted by the customer, becomes a binding contract.
As such, many providers (in particular professional services firms) will give estimates instead of quotations. Another way is to specify clearly what is covered in the quote, and any changes other than this will incur additional charges. One can also indicate how long will the quotation be valid for.
Obviously, any estimate given should be as accurate as possible based on an educated guess (generally manual cost per hour x number of hours + any material costs or disbursements + any taxes, shipping costs and premium) to prevent the customers from being surprised at the final bill. Provider any breakdowns to the customers if necessary.
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