How to price a quotation: margin, discount and approval

Before a quotation goes out you decide how much you want to earn, what discount you can give and who must agree. This guide follows one quotation from its first total to Ready to send.

Who it is forEstimator or ownerTime12 minutesProductBuildFlowLevelIntermediate

Before you start

A draft quotation with priced lines (the example, QT-0024, starts at a grand total of Rs 17,414,828 with a 5% discount).
To approve a large discount you need the discount approval permission; the Owner has it.

Steps

Open Totals & terms

Open the quotation and go to step 5, Totals & terms. You see Subtotal, Discount, Tax, Retention, Grand total and, for you only, the Estimated cost (internal) with the margin (here 15.79%).

Totals and terms step showing subtotal, discount, tax, retention and margin

Preview a target margin

In Target margin and profit balancing click Target 25%. The preview shows the projected sell subtotal (Rs 17,442,900) and projected gross profit (+Rs 4,142,689) before anything is saved.

Apply the margin

Click Apply margin to lines. Every priced line is scaled and the app says Sell rates updated to the target margin on sell price, the subtotal becomes Rs 17,442,900 and the grand total Rs 19,553,491 at exactly 25%.

Choose how to discount

Choose Percent of subtotal or Fixed amount. The quote keeps its own copy of the customer's default discount.

Discount type: percent of subtotal or fixed amount

Enter the negotiated discount

Type 12 in Discount (%) and click Save terms. The app says Quotation saved, the total falls to Rs 18,112,707 and the margin to 19.03%. A percent above 100 is refused.

Ask for approval

Above the workspace limit (10%) the box Discount needs approval appears: "This quote has a 12% discount, above the 10% approval threshold. It must be approved before the quote can be sent."

Approve with a reason

Type a Reason for approving of at least 10 characters and click Approve discount. The box then says Discount approved up to 12% with the date, Approved by your name and the Reason you typed.

Set retention and dates

Type the Retention you agreed (the workspace Default retention % is 5; here 5), then set Valid until and Committed delivery and click Save terms. Retention is held back from invoices later; it does not change the grand total.

Retention, valid until and committed delivery filled in

Check the payment schedule

Apply the pack Standard (deposit, stages by value, final). The schedule always adds up to the quote total, follows it when it changes, and ends at Allocated total 100%.

Payment schedule worked out from the total

Review and send

Go to Review & send. First it says Not ready to send: "Enter a quantity or area. This line counts as zero until you do." for Excavation. Click Fix, type Area 1000 and save. The subtotal becomes Rs 17,486,650, the grand total Rs 18,158,137 (margin 19.01%), the payment schedule moves with it and the page says Ready to send. A low margin only warns; it never blocks sending.

Check it worked

The summary rail shows Rs 18,158,137 and 19.01%.
Review & send says Ready to send.
The Admin › Settings › Audit log row Approve discount keeps the reason and the approved percent.

Common mistakes

Mistake	What you see	Fix
Reason too short	Enter at least 10 characters.	Write a real reason
Line with no quantity	Not ready to send: Excavation counts as zero	Click Fix and enter the quantity or area
Discount above the limit, not approved	The quote is not ready to send	Ask the Owner to approve
Percent over 100	Enter a percent from 0 to 100.	Correct the percent
Margin below your warning level	The margin on the sell price is 3.72%, below your 5% warning.	Check the prices or the discount; it does not block sending

Quick reference

Item	Meaning / rule
Margin	Profit divided by the sell price
Markup	Profit divided by cost
Approval limit	Set in Admin › Settings › General
Retention	Held back from invoices

Frequently asked questions

Who can approve a discount? A user with the discount approval permission. In the seeded roles that is the Owner only.

Does a low margin stop me sending? No. The review warns you, but sending is never blocked by margin.

Where is the default retention set? In Admin › Settings › General, Business defaults, Default retention %. Every new quotation starts with it.

Does retention change the quote total? No. It is held back from later invoices.

Do this in BuildFlow

BuildFlow runs this whole workflow. See what BuildFlow does and what it costs, or browse all step-by-step guides.