Document your calculation clearly
Cost estimates for small businesses in Germany
A cost estimate helps a customer understand the expected scope and price of a job. It is not an invoice and is not automatically the same as a binding offer. Clear wording reduces misunderstandings before work begins.
- Explain the scope, quantities, and expected costs transparently
- State the binding effect and validity period explicitly
- Communicate foreseeable material overruns early
What should a cost estimate contain?
Include the supplier, customer, date, project name, and expected scope. Break down labour, materials, third-party costs, and other items so the calculation remains understandable.
State whether prices are net or gross and how your Kleinunternehmer status affects VAT. Add a validity period and explain the assumptions behind the estimate.
- Contact details and a clear project reference
- Description, quantities, unit prices, and expected total
- Expected schedule, assumptions, and exclusions
- A statement about binding effect and validity
Cost estimate or binding offer?
German chambers of commerce describe a Kostenvoranschlag as an approximate calculation of expected costs. An offer is typically intended to conclude a contract on the stated terms and may create stronger price commitments.
The legal classification depends on the wording and circumstances. Avoid conflicting labels and state clearly whether the document is a non-binding estimate or a binding offer.
Changes and the final invoice
If a material overrun becomes foreseeable, notify the customer promptly and document the agreed next step. Do not wait until the final invoice.
Once the work is complete, invoice only the agreed or delivered items. Connect the estimate and invoice with a project or reference number.
Common cost-estimate questions
Is a Kostenvoranschlag always non-binding?
Not necessarily. Its effect depends on the wording, agreement, and circumstances. Mark the document clearly as binding or non-binding.
Can I charge for a cost estimate?
Any fee should be agreed transparently in advance. Without a specific agreement, Section 632(3) BGB generally treats a cost estimate as free of charge.
Can the estimate become the invoice?
Its data can be reused, but the final invoice must describe the work actually billed and include the invoice details required for that transaction.
Further references
The legal effect of a document and permissible price changes depend on the individual case. This guide is not legal advice.
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