BudgetPricingChoosing a vendorFixed price
How to compare software development quotes
6 min read
To compare software development quotes, first bring them back to the same scope: the same features, the same integrations, the same data migration and the same running costs after launch. Then compare the nature of each price (fixed or estimated), how each vendor handles changes, and the total cost over the life of the application. Two quotes that differ threefold almost always describe two different projects.
The instinct is to put the totals side by side. That is the last step, not the first. Our article on what a custom business application costs ends with a short checklist; this is the full method behind it, in five steps.
Step 1: rewrite every quote into the same grid
Each quote follows its author's logic: by technical work package for one, by screen for another, by days for a third. Before comparing, map every proposal onto a single grid organised by need, not by technology.
| Line item | Quote A | Quote B | Quote C |
|---|---|---|---|
| Discovery, mock-ups, prototype | |||
| Screens and user journeys | |||
| Business rules (calculations, validations, exceptions) | |||
| Integrations (ERP, accounting, CRM, payments) | |||
| Migration of existing data | |||
| Users, roles and permissions | |||
| Acceptance testing, fixes, go-live | |||
| Training and documentation | |||
| Hosting, backups, monitoring | |||
| Maintenance and changes in year one |
Each cell gets one of three marks: included and priced, explicitly excluded or not mentioned. The third one is what matters. A line that is not mentioned is not free: it will be billed later or left to you.
Step 2: read the assumptions, not just the lines
Every quote rests on assumptions, sometimes in small print, sometimes nowhere. They explain most of the gaps between vendors.
- Data: "migration of data supplied in a usable format" usually means that cleaning up years of spreadsheets is your job.
- Integrations: "connection to the ERP through its API" assumes the API exists, is documented and covers the need. If it does not, that line can double.
- Your team's availability: a tight schedule assumes fast sign-offs on your side.
- Review rounds: some quotes cap the number of revision cycles on designs or during testing.
Ask each vendor for its written list of assumptions. A vendor who has none still has them; they are just not written down.
Step 3: identify what kind of price it is
Two identical totals do not commit the vendor in the same way.
| Type of price | What is fixed | Who pays for an overrun |
|---|---|---|
| Fixed price | One amount for a described result | The vendor |
| Estimate in days, billed as worked | A rate, not a total | You |
| Capped estimate | A ceiling, then renegotiation | Shared, depending on the contract |
| Subscription | A monthly fee, development included | The vendor, who keeps running the software |
A "fixed price" presented as 40 days times a day rate is only fixed if the contract says you will not pay for day 41. Get the rule in writing. Our comparison of fixed price and time and materials covers the difference in depth, and our article on subscription versus an upfront build shows how to compare a monthly fee with a purchase price.
Step 4: compare total cost, not the entry price
Development is only part of what you will pay. A business application has to be hosted, backed up, monitored, patched and adapted for as long as it is in use. For each quote, work out:
total cost = development + (monthly running cost x months of use) + foreseeable changes
Use a realistic lifetime, at least three years for a business tool. If a quote says nothing about running costs, ask for the figure. A quote that is silent on this point is not cheaper; it is incomplete.
Watch the currency and tax lines too when vendors sit in different countries: one quote may be net of VAT or sales tax and another gross, and exchange rates move over a multi-year contract. Compare like for like, in one currency, with the same tax treatment.
Step 5: weigh what the price does not tell you
Once total costs are comparable, other criteria separate the offers:
- Evidence of understanding. Did the vendor show you anything (a prototype, mock-ups, a map of the user journeys) or just send a number? A quote built on a prototype you approved describes what will be delivered; the others describe what each vendor imagined.
- How changes are handled. Priced one by one and approved by you, or absorbed "as best we can" and billed as a lump sum later?
- Staged delivery. Usable releases along the way, or a tunnel until the final handover?
- Code rights and exit. What will you be allowed to do with the code, and what do you get back if you change vendor? Answers vary from one contract to another; see our article on source code ownership.
- Technology. A standard, documented stack can be taken over by another team; a proprietary platform ties you to the vendor.
Gaps that should worry you
Some differences cannot be explained by scope, and they deserve questions:
- one quote far below the others with no visible exclusion;
- a single total with no breakdown;
- integrations covered in one line, with no assumption stated;
- no line for testing, as if the software would work first time;
- nothing at all about what happens after go-live.
On the other hand, a higher quote that lists everything, assumptions included, is often the safest one. If you are pricing a mobile app specifically, our article on mobile app development costs adds the lines that are specific to app stores and devices.
What if the quotes still cannot be compared?
This is common when the need was described in a few lines: each vendor filled the gaps its own way. The fix is not a fourth quote but a closed scope. A prototype you approve becomes a shared reference: what is on screen is in the price, anything else is an explicit decision. You can even send that approved scope to the other vendors to get figures that finally compare. To choose between them afterwards, our twelve questions to ask a software development company complete the picture.
Where to start
Copy your quotes into the grid from step 1 and list every "not mentioned" cell: those are your questions for the next meeting. If your scope is not yet precise enough to price, LPR Studio presents a free visual prototype in a video call within 5 working days, and the fixed price is set from that prototype, before the first line of code. Our three models are described on the home page.