Give the customer a price they can understand and administer

The commercial job of your price

A good price document should help you do four things:

1. 1win the right work;
2. 2establish what you have agreed to deliver;
3. 3identify uncertainty before it becomes your cost;
4. 4create a usable starting point for milestones and variations.

It is not merely a sales document. It becomes part of the operating system for the job.

Use the right price basis

Use a quote when you are offering a price for sufficiently defined work on stated terms.

Use an estimate when information is incomplete and the final price must remain a reasoned forecast.

Use an allowance where a customer choice is not yet made but an amount is included.

Use a provisional sum where an element of work cannot yet be defined adequately.

Use a day rate or unit rate where that is genuinely how the work will be valued.

Do not put one label at the top and a different commercial basis underneath it. If parts differ, separate them.

Be specific about uncertainty

Weak:

Price may change depending on circumstances.

Useful:

This price assumes the existing subfloor is sound after removal of the vinyl. Repair or replacement is excluded and would be proposed separately if required.

The second statement identifies:

• the assumption;
• the inspection point;
• the excluded consequence;
• the route to a later decision.

It gives the customer warning without asking you to price an unknowable risk blindly.

Do not use estimate as a liability shield

An estimate should be realistic, explained and connected to a calculation basis. It is not permission to issue any final number after the work.

If labour is uncertain, state the expected hours and rates. If quantities are uncertain, state the assumed quantity and unit price. If design is incomplete, say what information the price awaits.

The customer can then compare risk, not only totals.

Make comparison fair

Customers often choose a lower proposal because one contractor excluded work more clearly than another included it.

You cannot control another contractor's document. You can make yours easier to trust:

• name the latest drawing revisions;
• list inclusions and exclusions;
• distinguish customer-supplied products;
• state VAT clearly;
• show allowances;
• identify design responsibility;
• explain payment stages;
• describe the change process;
• give the document a validity period.

Specificity may make your initial total look higher. It also shows why.

Review imported information

If Assurr interprets a quotation into scope items, milestones or price components, treat that as a draft for your review.

Check:

• no exclusion became an inclusion;
• no estimated item became fixed;
• no allowance became a product promise;
• no drawing reference was lost;
• the total and VAT position reconcile;
• the milestone allocation reflects how you will build and fund the job.

You remain responsible for the proposal you ask the customer to accept.

Preserve the original

Do not overwrite an accepted quotation when the job changes. Issue a revised version before acceptance, or record an accepted variation after the project begins.

The original position is commercially valuable. It shows what the new work changed.

The test

Give the document to someone who did not attend the site visit. Can they identify:

• what you will do
• what the customer must do
• which price elements may change
• what would cause a change
• how the change will be agreed?

If not, the price still depends on your memory.