A: Estimates and Quotes are not the same documents with different names and can be used in different situations to achieve separate distinct aims. The first thing we would advise is, regardless of which you are using, make sure they are in writing and expressed clearly. All though time consuming in themselves, this initial step will be invaluable if there are issues down the line.
We deal with estimates first since logically this may form the first contact with your customer when they are investigating initial costs for a job. Estimates are an approximation of costs where information may be incomplete or, as yet, unquantifiable, and are based upon the best information available. This is not to say that this should be a “guestimate” but should set out clearly the scope of works as you understand (accepting that this could be based upon limited information in the initial stages), making it clear that this could change as you progress if unforeseen circumstances arise or your scope of work increases. It is a useful tool to give your customer an idea of initial costs and worst case scenarios, making it clear which costs are fixed and which are variable, for example man hours and materials.
For example, the customer requests an ‘off-site’ indication of re-upholstering a standard sized three piece suite using a chenille fabric. You estimate the average cost based on the average sized suite and average cost of the fabric multiplied by the man hours which you would expect the job to take, in your experience. It may be worth highlighting that the price may be affected if the condition of the furniture is such that the frame needs additional work for the work to be completed to a satisfactory standard.
Conversely, a quotation is binding, being a fixed price offer which cannot be changed once accepted by the customer – even if you have to carry out more work than was originally envisaged, unless the customer changes the amount/type of work required or you discover something completely outside of the scope of what was agreed. On this basis, a quotation should only be issued after an onsite visit once you are fully aware of what is required.
In the above example above, you will now have inspected and measured the suite, ascertained the condition of the frames, the consumer has selected the fabric from swatches and you have indicated the number of man hours for the work based on the accurate information you have gathered.
In summary, you should only use an estimate as an initial guide and make this clear to the consumer; and you should only use a quotation where you are certain you wish to be legally bound, upon its acceptance and once all parties are fully appraised as to what the job entails.
These materials are provided for general guidance and are not intended to be relied upon in individual cases or to provide specific advice – separate advice on pro-forma documents and the content of these in each individual case should be taken.
Deputy Chief Ombudsman