How Much Does Your Quoting Process Actually Cost?

Which quotes should you compare when calculating process cost?

Group comparable work before calculating averages: repeat requests, new projects, preliminary guidance, and revisions may require different effort. Use categories the team can apply consistently and preserve them in before-and-after comparisons. Otherwise, a change in project mix can look like a change in efficiency.

What time should be included in the cost of a quote?

Include active preparation, clarification, specialist review, correction, and handoff effort across everyone involved. Record elapsed waiting separately. A request sitting overnight affects customer experience, but those hours should not be multiplied by a labor rate as if someone worked continuously on the case.

Record elapsed time separately. A request may sit overnight without anyone working on it. That delay matters to the customer; it should not be multiplied by a labor rate as though someone handled the case continuously.

How do you calculate the handling cost per quote?

Multiply active handling hours by a defensible internal rate, then divide by the number of comparable quotes. State the period, sample, included activities, and rate basis. The NATA Quote Cost Review example below uses assumed figures to demonstrate the calculation; it is not client data or a market benchmark.

Suppose ten comparable quotes require an average of thirty minutes of active work each. That is five hours of handling. If the business chooses an internal planning rate of $60 per hour, the modeled handling cost is $300, or $30 per quote. The rate is an assumption for the illustration; a company should use a defensible basis of its own.

Now suppose the team tests a change and observes an average of twenty minutes across another ten comparable quotes. The modeled difference is one hour and forty minutes, equivalent to $100 at that assumed rate. It is an estimate of the value of released capacity. It does not establish that the business spent $100 less.

Check whether the cases are genuinely comparable before attributing the difference to the intervention.

How do you identify which quoting activity to improve?

Break the total into activities before selecting an intervention. Specification advice, copying information, and routine approvals have different causes and possible remedies. A document generator may reduce little if the dominant effort is resolving an open product decision or waiting for authority.

The purpose of the calculation is to locate a decision. A total cost figure without an activity breakdown can make the wrong intervention look attractive.

Can faster quoting be counted as additional revenue?

Faster quoting is not automatically additional revenue. Examine actual opportunities and orders, the role of the changed process, and other changes during the period before attributing sales. Keep observed response speed, accuracy, released capacity, and confirmed financial effects separate in the review.

Similarly, an error avoided may be valuable without a reliable monetary estimate. Record the avoided work or observed quality change rather than assigning a dramatic price to a hypothetical failure.

How do you value time released from preparing quotes?

Record what the released time made possible: customer advice, additional opportunities, less overtime, reduced clarification, or other work. Capacity is not the same as cash saved. Use the observed change to support the benefit claim instead of assigning the largest possible monetary value to every hour.

Keep those outcomes distinct. The quoting process earns a better review when its costs and benefits are described precisely enough for someone else to check the calculation and understand what changed.

Frequently asked questions

What hourly rate should you use for quoting cost?

Use a rate whose purpose and basis the business can explain. A planning rate, employment cost, and owner opportunity cost answer different questions. State the chosen basis rather than presenting an assumed rate as a market fact.

Can lost sales be calculated from quote turnaround time alone?

No. Timing may matter, but estimating lost sales requires opportunity evidence and consideration of other factors. Do not treat every delayed quote as revenue that would otherwise have been won.

Is time released from quoting a cash saving?

Only when spending actually falls. If the same paid hours remain, the immediate effect is capacity. Record how that capacity is used before making a revenue or profit claim.

Sources and case basis

This guide presents a working method, not measured client results. Examples are illustrative unless explicitly attributed. Sources linked in the text support the stated principle or published example; they do not validate the NATA worksheet as an assessed instrument. Prepared and revised November 4, 2026.