A quotation format for a small factory: what each line should say

The purchase officer reads your quotation once. Stores and accounts never see it, yet they read it all the time, because the purchase order copies your words. So lay it out for all three. Purchase compares price basis, freight, delivery and validity. Stores checks the truck against your item description, size and unit of measure. Accounts needs your legal name, GSTIN, HSN codes and a bank account in the same name. Write each line for the person who will check it, and the order moves from quote to payment without coming back to you.

The format, for two readers who never see it

At a factory, or at a contractor's site store, the paperwork runs in a chain. Purchase raises a purchase order, and much of it is your quotation retyped: your description, your unit, your rate. Stores checks the goods and your delivery challan against that PO and makes a goods receipt note. Accounts usually pays only when your invoice agrees with both.

So a word you chose travels to people who cannot call you. If your quote says "per running metre" and the PO says "Nos", the stores keeper counts pieces and the accountant cannot match your invoice. Nobody rejects you. Payment just waits.

Here is the format. The letter in brackets says who reads each line: P for purchase, S for stores, A for accounts. Rates and quantities are left out on purpose.

[A]  Legal name exactly as on your GST certificate
[A]  GSTIN, PAN, Udyam number if registered, works address
[P]  Quotation number and date; valid till (a date)
[P]  Buyer's legal name and delivery address: plant or site
[P]  Their enquiry reference and date

     Line | Item | HSN | Unit | Qty | Rate | GST % | Amount
[S]  1    Kerb stone, M-30, 300 x 450 x 150 mm, batch date marked
[S]  2    Drain cover slab, M-30, 600 x 400 x 75 mm
[P]  3    Freight to site, per truck of (n) pieces

[P]  Price basis: delivered at site, unloading by buyer
[P]  Delivery: first truck (n) days from PO, then (n) per week
[S]  On every challan: PO number, line numbers, piece count
[S]  With each truck: test report, if the PO asks for one
[P]  Payment: (n) days from invoice
[A]  Bank: account name as on GST, account number, IFSC
[S]  Dispatch contact: name and mobile
[A]  Accounts contact: name and mobile

The lines shown suit a precast concrete unit. Change the items, keep the shape.

What purchase holds you to

Purchase lines your figures up against other suppliers, and "transport extra" leaves a blank filled with a guess. So show freight as its own line. The post on replying to an RFQ covers that comparison.

A quotation is also the paper purchase will hold you to months later. Quote the quantity and unit asked for. Give validity as a date, and name the cement or steel rate your price rests on. Then a revision after that date is an agreed term, not a surprise. Count delivery from the PO date, not from "receipt of advance" unless you are asking for one, and say so if you are.

What stores checks against the truck

The stores keeper has the PO in one hand and your challan in the other. They check the description, the count and the condition, and have no authority to accept "nearly the same".

Write the item the way stores will see it: grade, size, and any marking on the piece. Use one unit of measure from quotation to invoice. Put the PO number and its line numbers on every challan, with the piece count per line. For anything that chips in transit, agree before the first truck who counts the damage and when. A stores keeper who finds broken pieces after your driver has left writes the shortfall on the receipt note, and that note is what accounts believes.

What accounts needs to pay you

Accounts matches three papers and a bank account. Your legal name must be identical on the GST certificate, the quotation, the invoice and the bank account. The HSN code and GST rate on the quotation must be the ones on your invoice. Your CA tells you which apply. After that, use the same answer in every document.

Put your Udyam number on the quote if you have one, and ask your CA what it means for you. Name an accounts contact. When an invoice is stuck, their accountant wants to speak to yours, not to a salesperson.

For example: a precast unit in Hingna

Imagine a precast concrete unit in the Hingna industrial area of Nagpur quoting kerb stones and drain covers for a road contractor's site near Chandrapur. The details are illustrative.

The owner thinks in running metres, because road drawings are measured that way. The quotation said "Kerb stone M-30, rate per running metre, transport extra". The contractor's purchase office raised the PO in "Nos" and left freight blank. At site, the stores keeper counted pieces, found a few chipped, and recorded the shortfall. The first invoice came in running metres plus a freight bill nobody had approved. Accounts could not match any of it. Payment waited while the PO was amended.

For the next enquiry, the owner rebuilt the quotation around its three readers. Kerb stones were quoted per piece, with "each 450 mm long" in the description so the engineer could still convert to metres. Freight became line 3 with a price per truck. Every challan carried the PO number, line numbers and piece count, and the quote named who would count chipped pieces at unloading. The next PO from that contractor went from first truck to payment with one query, about the unloading charge. It took the owner a week of rewriting the template first.

When this format is more than the order needs

A buyer on a running rate contract needs the contract number on the PO, not a fresh quotation. A builder collecting fifty kerb stones from your gate, paying before loading, needs a pro forma invoice to pay against, not a stores-ready quotation. When the buyer sends a formal RFQ with a price schedule, answer in that format instead of yours.

A good format will not rescue a price that is too high. It stops you losing paper-trail orders you had already won on price.

For building and construction material makers, whose trucks unload at a site store, the stores lines matter most. The wider manufacturing hub has the other posts for factories.

Lay the next PO beside your quote

When the next purchase order arrives, put it beside the quotation it came from before you plan production. Mark every place where the buyer's wording, unit or freight line differs from yours. Query those before the first truck leaves, then rewrite the same lines in your format. If you want a quotation template built around your own items, tell us what you need.