![]() It is allowed due to the nature of an estimate that it does not bind the parties involved in it. Uses and benefits of an estimateĪn estimate gives information about the items or services by the seller to the buyer with the predicted prices.Ī customer usually requests estimates from various sellers or service providers to select the best offer that works for him in a particular market. Hence, the issue of estimates is not mandatory under any law but is a good business practice. Further, there are cases where the buyer may want to go directly with the invoice by the seller. The buyer may call for an estimate even before a quotation is raised. It is also known by the names such as cost estimates or proforma invoices or bids.ĭue to its nature as a non-binding document, the buyer may opt out of the sale transaction without worrying about any repercussions. It is also a way to agree or negotiate on the price and scope of work before it commences. ![]() It is an informal document usually used during the initial stages of sales. An estimate depicts the amount that the seller wants to charge for goods or services yet to be supplied to a potential customer. Meaning of an estimate for invoicing purposesĪn estimate refers to a non-binding document that a seller sends to a buyer intimating the pricing for products or services that interests the buyer.
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