Proposal vs Quote and How They Differ from Other Documents

Jessica B.

Seasoned technical writer giving you top Salesforce Tips.

Updated: Jan 13th, 2025

When it comes to interacting with customers and clients, there is a large variety of documents for you to choose from depending on the situation. We will break down each type of business document when it comes to generating quotes, bids, and even proposals to make sure you aren’t left scratching your head when it comes to choosing the best document type.

What is a Quote?

A quote is a document provided by you to a prospective customer or client. It should outline the specific pricing for a product or service that the customer is interested in. A central component of a quote is the pricing details including a breakdown of the base price, tax fees, and other add-ons or services.

You should consider including terms and conditions that specify payment details, delivery schedules, warranties, return or exchange policies, or how long the quote is valid if the price is subject to change. Quotes are used commonly if a customer requests pricing for a service or product or if your business is bidding on a project or contract.

Quotes are not typically legally binding documents, they serve as formal offers which can lead to a contract if the quote is accepted.

What is a Proposal?

Proposals are formal documents or written plans that outline a project, idea, or plan of action and can be presented to an organization or stakeholders for consideration. You will mostly use proposals if you are in sectors such as academia, government, and business when you need to pitch an idea, seek funding, or request approval for a course of action you want to take.

Your proposal should include an introduction to provide content to the reader on what you plan to achieve as well as introducing individuals or organizations that are key to your proposal. Make sure you identify the problem or need you will address and outline the goals and objectives of your project or plan. Describe how you plan to approach the problem or outline how your plan will be implemented, including details about the method, strategy, and resources. If your project is time-sensitive, include a schedule that outlines the expected milestones and deadlines. Some other things to include are a budget, the benefits of using your plan, a call to action, and any supporting documentation that provides additional information or context.

You should choose a proposal if you need to present a well-structured document to gain approval or support for your project or idea.

The Difference Between a Quote and an Estimate

If you are working in a business or commerce sector you will need to provide customers and clients with information about the expected cost of your goods or services. There are some key differences between quotes and estimates to keep in mind.

When it comes to legal implications quotes are a firm, fixed price for a product or service. If a customer accepts the quote, both the customer and the provider are typically obligated to honor the quoted price. An estimate provides an approximation of the expected cost and because it is not set in stone, the final price can vary from the estimation provided.

You would generally use a quote when it comes to well-defined projects or products where the scope of work is clear. Estimates are commonly used when the scope of work is not fully known or if it is difficult to predict the final costs due to a number of variables. if you are in the construction business you would provide an estimate for a renovation project.

Revisions can often be necessary for quotes when it comes to the scope of work changing or if the customer requests additional features or services. Changes to quotations normally require mutual agreements between you and the customer. You can easily revise estimates as they are not firm commitments.

Quotes and estimates can both impact the legal obligations and financial aspects of your business transactions. It is always important that you clarify with your client to ensure you provide the correct document that matches expectations.

The Difference Between a Proposal vs an Estimate

Proposals and estimates fulfill different purposes when it comes to creating business documents.

Proposals are used to outline plans and solutions when it comes to addressing a problem or need. You will outline what will be done, how it will be done, and why it should be done. Estimates are used to provide the expected cost of a product or service only. It is commonly used to inform your clients or customers about the potential financial aspect of your product or service.

Estimates and proposals are not typically legally binding as they are not set-in-stone commitments.

You should use a proposal to persuade and seek approval when it comes to creating plans of action or fulfilling a need whereas estimates are used to inform your clients about potential expenses.

The Difference Between a Bid vs Quote

Bids and quotes are often used when it comes to sales and procurement but each has its own meanings and implications.

Bids are formal structured documents that are submitted by your business as a response to a proposal request. Quotes are provided by a business to a specific request from a potential customer or client. Your bids should be competitive in nature as your bid will be going up against bids submitted from your competition. Quotes are normally used in non-competitive situations where you were contacted to provide a price for a specific item.

If you need to respond formally to a competitive request then choose a bid format, this offer will typically be binding. If a potential client or customer has requested pricing of a specific product or service then choose the quote format.

The Difference Between a Proposal vs a Contract

Proposals and contracts are two distinct documents that are used in business but each has its own purpose and legal implication.

Proposals should be used if you need to outline a plan, idea, or solution for a specific need or project. In contrast, a contract is a legally binding agreement that covers the terms and conditions of a business relationship including responsibilities and obligations. You can even use templates to generate proposals when building websites.

A proposal is not legally binding as it is simply a persuasive tool you can use to communicate your ideas. Contracts are legally binding as does require both parties to sign the contract, once the contract is signed there is a legal obligation to fulfill the terms and conditions.

If you need to present an idea or outline a plan then choose the proposal format, this is a starting point for discussions around how you can fulfill a need. A contract should be used if you need to formalize the terms and conditions of a business relationship or transaction.

Create Branded Documents for Every Opportunity

Titan is a third-party app for Salesforce that is easy to use and allows you to easily build custom contracts, proposals, and invoices directly from Salesforce in seconds. By drawing on your Salesforce data you can ensure that the latest data is always displayed in your business documents to ensure there are no embarrassing typos that require amending. Using Titan you can also create Salesforce automation for workflows that trigger to produce any kind of business document depending on the criteria that you set. Titan Docs are fully accessible and meet all requirements outlined in section 508 and are 100% secure and compliant with HIPAA, SOC 2, ISO, GDPR, and other leading frameworks.

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