Saturday, October 10, 2015

#Startup : Validity of Quotation

How many of us offer something to our clients - especially in B2B sales, and then the client puts in on hold.  Then comes a situation where the client re-invokes the proposal and says 'hey, can we look at this again'.  And your last proposal - stands.  Can you dare to say that we need to submit a fresh proposal?
Time bound validity of offer is key for conducting business

Customers solicit solutions - software, hardware, services, support, consumables - all and sundry in a proposal or a quotation. Many companies - which offer quotations give in the form of a 'proforma invoice' - to clearly classify that they are NOT an legal note, and only for reference.  But proposals for complex projects have many variables - scope, hardware, foreign exchange dependencies, consumable costs, version upgrade windows, stock availability, seasonal factors - and therefore, a budgetary proposal, while can be a reasonable indicator. The customer cannot hold your collar based on it.

Here in comes the validity of quotation. Notwithstanding the circumstances of the proposal, a quotation or a budgetary proposal, irrespective of the nature of product, service or a solution should be valid for a particular time period. This includes prices, discounts, and other aspects.  While E-commerce, FMCG and retail industries handle this very clearly, B2B businesse often overlook this key term in the proposal.  The budget CANNOT be valid forever.  This validity is based on your terms and if needed, on written request and review thereof, can be extended.

Consult your legal team once, based on the nature of your business. Else, in the madness of selling and fear of losing the customer, and other stressful and extraneous circumstances, you will be forced to bind yourself to your offer.  This can be detrimental to all.

- Ashok Subramanian
Cherunathury Tech Ventures


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