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Quotation vs Sales Order

A quotation and a Sales Order are created at different stages of the sales cycle.

A quotation is shared with the customer before the order is confirmed. It communicates pricing and commercial terms.

A Sales Order is usually created after the customer accepts the quotation. Unlike a quotation, it is primarily an internal document used by production, procurement, dispatch, and finance teams to begin order execution. It also helps to track the pendency of the quantity of the order.

While customers receive quotations, Sales Orders are generally used within the organization to ensure every department knows what needs to be delivered.

In many businesses, the workflow looks like this:

Customer Enquiry → Quotation → Customer Approval/Purchase Order → Sales Order → Delivery → Tax Invoice

Using both documents improves coordination, provides greater clarity on roles and processes, and helps minimize execution errors by ensuring all stakeholders are working from a shared understanding.

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