A construction quotation has its own vocabulary, and using it correctly is most of what separates a professional quotation from a number on a page. Four terms do the heavy lifting.
The four construction quotation terms
| Term | What it means | Why it matters |
|---|---|---|
| Provisional sum | An allowance for work not yet fully defined | Protects both sides where scope is genuinely unknown |
| Prime cost sum | An allowance for an item the client will still select | Tiling, sanitaryware, fittings |
| Variation order | Written instruction changing the scope | The document that gets extra work paid |
| Retention | A percentage held back until completion | Common on larger contracts. Price for it in cash flow |
Using a provisional sum honestly, with the basis stated, is far stronger than guessing a fixed price and arguing later. Say what the allowance covers and what happens if the actual cost differs.
Structure the quote in sections
- Preliminaries and general. Site establishment, protection, hoarding, temporary services, cleaning.
- Demolition and site clearance, with disposal stated.
- Each trade as its own section, so a client can see and question one part without renegotiating everything.
- Provisional and prime cost sums, clearly labelled.
- Exclusions, in one place, in plain language.
A sectioned quote is also easier to convert into progress invoices, because the stages are already priced.
Progress payments
Anything running beyond a few weeks should be staged. Tie each stage to a completed milestone rather than a calendar date, so payment follows work rather than time.
- Deposit on acceptance, covering site establishment and initial materials
- Stage payments against defined milestones: slab, wall plate, roof on, first fix, second fix
- Final payment on practical completion
- Retention released after the defects period, where applicable
Exclusions worth naming
Council plan approval and fees, NHBRC enrolment where applicable, geotechnical investigation, engineer's design and certification, connection of municipal services, and anything found below ground. Ground conditions are the single most common source of a construction dispute, and the only defence is having said so up front.
Common questions
How much deposit is normal?
Enough to cover site establishment and the first material order. On residential work, a third is common, though it depends on the job.
What is a reasonable retention?
Retention is contractual rather than fixed. What matters is that you priced for the delay in receiving it.
Do I need a written variation for small changes?
Yes. Small changes are the ones nobody remembers agreeing to.
Build a sectioned quotation, then invoice each stage as it completes.
Create a professional quotationDisclaimer: This content is for general information only and does not constitute legal, tax, accounting or financial advice. Always confirm important requirements with SARS, the relevant authority or a qualified professional.
