Guide to Time-Tracking
Using the correct terminology is important in business, not least in the world of freelancing. Yet when it comes to defining project bids, estimates, quotes, and proposals, the right terminology can often go out of the window. For freelance professionals, the difference between a bid and a proposal, or an estimate and a quote, can often be negligible.
This is a problem because for clients, especially the larger companies, the differences are more pronounced. When they demand a proposal, they will be deeply unimpressed when they instead receive what they deem to be a quote or an estimate.
What the client expects
To ensure a better working relationship between freelancer and client, it’s vital to know the differences between these documents. A freelance professional should always confirm with the client, when in doubt, as to which type of document they want. This can be achieved by asking the client a few questions about what type of information they would like to see.
This reduces misunderstandings and avoids time wastage.
Bids, Estimates, Quotes, Proposals, and also Contracts
Freelance project bids, estimates, quotes and proposals all overlap with one another to some degree but are still distinct documents fulling different roles.
And what about freelance project contracts? Where do they come into the picture?
Let’s look at each type of document in more detail:
In freelancing terms, a project bid is where the freelancer bids to be awarded a project contract via a kind of reverse auction. The freelancer is often battling dozens, if not hundreds, of other freelancers to get noticed by the buyer.
There are many well-known freelance bidding sites where this bidding process takes place every day. The freelancer has to find ways to stand out from the crowd by writing a bid that persuades the buyer to choose them. The bid usually includes the freelancer’s rates, availability, experience, and how fast they can do the job.
It’s often the case that the freelancer will know little about the project until it’s actually been awarded to them.
A project estimate is, as the name suggests, a general estimation of what the project will cost. An estimation is given early on in the dialogue between a prospect and a freelancer. The prospect gives a general overview of their business and their requirements, and the freelancer then provides an anticipated price range.
A project estimate is not legally binding and is understood by both parties to be subject to change, once further details of the project are provided. The estimate simply allows the prospect to get a sense of how much they’ll probably need to pay and whether to continue.
A project quote is related to a project estimate except it’s more detailed and precise. The price you provide in the quote needs to be the price the client will pay, once they agree for the project to go ahead. This also applies to the service details, timelines, and project scope. When the client accepts the quote, nothing should then be changed.
Before writing a project quotation, it’s extremely important to understand exactly what the client needs, what the project entails, and to confirm the details of the quote before it is accepted.
A project proposal is like a bid in some ways. It’s usually written when a prospective client needs more information and persuasion about your abilities and how you can fulfil their needs. A business owner may sometimes ask two or more freelancers to submit proposals and then they’ll choose which most appeals.
A project proposal is much more detailed than a bid and has more solid information than an estimate or quote. Before writing a proposal it’s important to understand what the project is, what the client requires, and the core goals. You can then write a detailed proposal which builds trust and meets with the prospective client’s expectations.
While not legally binding, it’s generally considered that once accepted, the various terms and conditions, such as pricing and timeframes, should remain fixed.
With Invoice Ninja you can design attractive proposals quickly and easily with our specialist drag-&-drop proposal creation tool.
Then there’s the project contract.
A project contract is an entirely different beast to the aforementioned documents. The key difference is that a contract is legally binding. It’s a legal agreement between freelancer and client, which is often expected by both parties before any work begins. Contracts remove the potential for either party to back out of their contractual agreements. This provides a security that’s vital for a freelancer’s peace of mind and cash flow.
A project contract often contains very similar information to a project quote. The information contained within a contract includes the project’s scope, the various prices, the expected timeframes, and various terms and conditions related to payments, deliveries, intellectual property ownership, and any other information you or your client deem relevant.
Before sending or signing a freelance project contact it’s important to confer with your client on any issues you or they are unsure about. It’s always best to err on the side of caution if you have lingering doubts about anything.
Unique roles and functions
As you can see, each type of document has a unique role and function. Yet despite this, the terms continue to be used interchangeably by freelance professionals and clients alike.
This can result in confusion and misunderstandings, which can potentially derail a promising freelancer-client relationship before it even really gets started.
Always check with the client what exactly it is they need to read. Then assess based on the answers they give which type of document will be most suitable to send.