How to Compare Software Development Quotes (With a Template)
How to compare software development quotes: a side-by-side template, why prices for the same project vary so much, and what to ask before you sign.
Freelance full-stack developer
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The way to compare software development quotes is to leave the total until last. Put every quote into the same template, work out what each one actually covers, then convert them to the same scope and the same time period. Only then can you tell whether the gap between €11,500 and €39,000 is about price, or whether you've been quoted for three different projects.
I'm a freelance developer based in Denmark and I write quotes myself, so I'm not a neutral party. What I do know is where a quote can look cheaper than it really is.
The short answer: compare in four layers
Line the quotes up in this order, and only move to the next layer once the previous one is settled:
- Scope: do the quotes cover the same work, and what do they explicitly leave out?
- Total cost over two to three years: the build, plus whatever's missing, hosting and the change requests that always come.
- Risk: who pays if it takes longer, and how many assumptions is the price resting on?
- People: who will actually do the work, and how do they answer when you push?
Here's a made-up example of what that looks like. Three suppliers have quoted for the same customer portal: your clients log in, see their orders and download invoices, and the data comes from your accounting system.
| Quote A | Quote B | Quote C | |
|---|---|---|---|
| Price (excl. VAT) | €11,500 | €22,000 | €39,000 |
| Based in | Not stated | Northern Europe | Western Europe |
| Who does the work | Not stated | One senior freelancer | Project manager, designer and two developers |
| Pricing model | Fixed price | Paid discovery, then fixed price | Hourly, with an estimate |
| Scope described as | One sentence | Feature list plus exclusions | Feature list plus exclusions |
| Accounting integration | Not mentioned | Included | Included |
| Testing and documentation | Not mentioned | Automated tests for core features | Automated and manual testing |
| Hosting after launch | Not mentioned | EU hosting, separate agreement, price stated | EU hosting, first year included |
| Change requests | €95 per hour, no estimate step | Same rate, written estimate first | Hourly rate |
On paper, A is cheapest. But it skips the integration, testing and hosting, and those costs don't go away because the quote ignores them. C includes a design process and a whole team that B doesn't. These aren't three prices for one project. They're three different projects. Quote B also follows my own model, a paid discovery phase and then a fixed price, so weigh the example with that in mind.
Not sure these numbers are sensible for your kind of project? Start with my European guide to software development cost.
Why quotes for the same project vary so much
A top quote at three or four times the lowest is normal, and it rarely means anyone is ripping you off. It's usually a mix of these six things.
Everyone read your brief differently
Anything your brief doesn't say, the developer fills in with assumptions. "Users can log in" might mean email and password, Google or Microsoft sign-in, or a national eID such as BankID, and that can be the difference between a few hours and several days of work. The more your brief leaves open, the further apart the quotes land. In my view this is the single biggest cause of wild price differences.
Rates depend on who and where
Hourly rates vary a lot across Europe. In Denmark, LønRadar's 2026 guide to freelance IT rates puts senior freelancers at 800-1,200 DKK an hour, roughly €105-160, excluding VAT. Agencies usually charge more because the rate also covers project management and sales, while nearshore teams in Central and Eastern Europe and offshore vendors typically quote far less. A lower rate only helps if the hours don't grow to match. See what a developer really costs: in-house, freelance, agency or offshore and freelance developer rates in Denmark.
The pricing model shifts the risk
A fixed price on a fuzzy project includes a risk buffer, because the developer pays if it takes longer. An hourly quote only shows an estimate, so the risk sits with you. That means you can't compare a €30,000 fixed price with a €24,000 estimate without asking what happens when the estimate slips. The trade-offs are covered in fixed price vs hourly rate.
Different things are included
Design, project management, testing, documentation, server setup, hosting, post-launch support and handover are all things some quotes include and others quietly skip. Each one can be a noticeable share of the price.
Some build from scratch, others reuse
One developer builds on an existing platform, a plugin or their own starter code, while another writes everything from scratch. Reuse can work in your favor. Just ask who owns the reused parts, what licenses come with them, and whether another developer could take over later.
Some want the job more than others
A developer with an empty calendar often quotes lower than one who's fully booked. Some quote low to get in the door and make their margin on change requests later. You'll spot it in the rate for extra work and in how loosely the scope is written.
What a good software quote should include
A quote you can actually compare usually contains:
- Your problem restated in the supplier's own words, so you can see whether they understood it.
- A list of what will be built.
- A list of what's not included.
- Assumptions, for example "assumes your accounting system has a public API".
- The pricing model and price, ideally split into phases or milestones.
- A timeline, and what it depends on from your side.
- A payment schedule.
- How change requests are estimated, approved and billed.
- Who owns the code, and where it lives.
- What happens after launch: bug fixes, hosting and support.
- Who will do the work.
Read the exclusions first. A quote without any isn't more complete. You'll just discover them on the invoices.
A short quote isn't a bad sign on a small job. It just means the questions are on you.
How to compare software development quotes, step by step
For a small job, the first four steps are usually enough.
1. Give everyone the same brief
Send the same brief, questions and deadline to every supplier, and ask for hours broken down by phase or feature. If you clarify something with one supplier, send the clarification to all of them. Otherwise you're comparing quotes for different jobs without knowing it.
2. Put every quote into the same template
Quotes arrive as 20-page PDFs, ten-line emails and spreadsheets. Move the key facts into one grid so the gaps become obvious. Copy the template below into a spreadsheet with one column per quote.
| Item | What to note for each quote |
|---|---|
| Total price | Amount excl. VAT, currency, and whether it's fixed, an estimate or capped |
| Hours and rate | Total hours and hourly or day rate, including for extra work |
| Scope | Which features are included, and how precisely they're described |
| Exclusions | What's explicitly left out |
| Assumptions | What has to be true for the price to hold |
| Quality | Testing, code review, documentation and handover |
| Hosting and data | Where it's hosted, monthly cost, and who handles personal data |
| Change requests | How new requests are estimated, approved and billed |
| Timeline | Start, milestones, launch and what they depend on |
| Payment | When you pay what |
| Ownership | Who owns the code and where it lives from day one |
| Contract | Which country's law applies and who signs |
| People | Who does the work and who you talk to |
If you can't fill in a cell from the quote, put a question mark there. Those are your questions for the next step.
3. Chase the gaps with the same questions
Collect the question marks into one list and send it to every supplier. Then watch how they answer. A precise reply within a couple of days says a lot about the collaboration ahead. So does "we'll figure that out as we go" in response to a question about the integration.
4. Normalize to the same scope and the same period
Put a price on the gaps, then cost out the first two to three years instead of the build alone. Take quote A from the example. If the missing integration is roughly 40 hours at A's own change rate of €95, you're already at €15,300. Add testing, hosting and the changes that always come in year one, and the distance to B shrinks fast.
My rule of thumb is to set aside 15-20% of the build cost per year for hosting, updates and small improvements. Use the same percentage for every quote, but compare each supplier's rate for post-launch hours, because you'll be buying those for years. See how developer retainer agreements work.
5. Weigh the risk, not just the price
Two quotes with the same price can carry very different risk. Look for:
- A fixed price on an unclear project: either the buffer is large, or changes will be expensive.
- An hourly rate with no cap: ask for an estimate and a cap per phase.
- A long list of assumptions: each one that turns out wrong moves risk back to you.
- One person: what happens if they're ill? Is the code in your own repository, with enough documentation for someone else to take over?
- A team: is the work done by the people you met in the sales meeting?
6. Walk through the top two quotes on a call
Ask your two strongest candidates to walk you through their quote. Three questions reveal a lot: "What's the hardest part of this project?", "Where is your estimate least certain?" and "What would you cut if the budget were 30% smaller?" An experienced developer can answer all three concretely. A vague answer to the last one usually means the scope hasn't been thought through.
Extra checks when quotes come from different countries
If the quotes come from different countries, a few differences never show up in the headline price:
- VAT: compare every quote excluding VAT. According to the EU's Your Europe guide to cross-border VAT, a supplier selling services to a business in another EU country usually doesn't charge VAT, and the customer pays it at home under the reverse charge procedure. Check the details with your accountant.
- Currency: ask for a fixed price in the currency you budget in, so exchange rates don't move your bill.
- Governing law: which country's law applies, and where would a dispute be handled? Either way, get the IP transfer in writing.
- Time zone: feedback loops slow down when you only overlap for an hour or two a day.
- Data: if the supplier will host the system or handle your users' personal data, Article 28 of the GDPR requires a contract with them as a processor, usually a data processing agreement (DPA). Ask where the data and backups will be stored. This isn't legal advice, so involve a lawyer if a lot is at stake.
Red flags in a quote
Some things are worth stopping for, whatever the price:
- Only a total, with no breakdown by phase, feature or hours.
- No exclusions and no assumptions, so you can't tell what you're buying.
- A fixed price for a large project described in half a page, with no discovery phase first.
- A low project price paired with a high or vague rate for changes.
- Unclear ownership: the code sits in the supplier's account, or you get a license instead of the rights.
- A timeline that doesn't depend on anything from you. Every real project depends on your answers and your testing.
- Full payment upfront with no milestones.
When the cheapest quote is the right one
The cheapest quote isn't automatically the worst. It can be the right call when:
- The job is small and well defined, such as connecting two systems with well-documented APIs.
- An off-the-shelf tool covers the need. If one quote is €4,000 for something built on WordPress or Shopify and another is €27,000 for custom code, the real question isn't who's cheaper but whether you need custom software at all. Often you don't, and then you don't need a developer like me either.
- You're testing an idea. A prototype meant to prove that someone will pay doesn't need the same quality as a system that has to run for five years.
The most expensive quote is often right when the system is business-critical, or when you need a team with guaranteed response times and on-call cover. Then an agency is usually a better fit than a single freelancer, even a cheaper one.
Next steps
Put your quotes in the template, send your questions, book a call with the top two, and run through this checklist before you sign.
Before you sign a software quote
- Scope: You know what's included and what isn't.
- Assumptions: You've checked they hold, for example access to the APIs you'll need.
- Total cost: You've added up the build, hosting and changes for the first two to three years.
- Changes: The process for estimating and approving new requests is in writing.
- Ownership: The code is yours and sits in your own repository from the start.
- Data: You know where it's hosted, and there's a DPA if the supplier handles personal data for you.
- Contract: You know which country's law applies, and you've compared every price excl. VAT in your own currency.
- People: You know who'll do the work, and you've spoken to them.
If the best quote is still over budget, read how to negotiate with a developer without lowering quality. How I price my own work, with a fixed-price discovery phase and code you own from day one, is on my pricing page. You'll be talking directly to me, and you'll get a reply within one business day.
Frequently asked questions
How many quotes should I get for a software project?
Two or three is usually enough. With fewer you have nothing to compare against, and with more it's hard to give each supplier a proper walkthrough. Many developers also put less effort into a quote when they know ten others are bidding. Pick three suppliers carefully rather than posting your brief on a freelance marketplace.
Should I pay for a software development quote?
A rough estimate after a short call is normally free. A precise quote for a larger project needs the requirements, integrations and risks worked out first, and many developers charge for that time as a discovery phase. I start larger projects with a paid, fixed-price discovery phase myself. A good one leaves you with a written plan you own and can use to get quotes from others.
What's the difference between an estimate and a quote?
An estimate is an informed guess at how many hours the work will take, and you usually pay for the hours actually used. A fixed-price quote is a commitment to deliver a defined scope for a set price. Many proposals mix the two, so check which parts are fixed and which are estimates. That belongs in the contract, not in an email thread.
Is it OK to show one developer's quote to another?
Your own brief is yours to share. A quote, though, is the supplier's work, and some mark it as confidential, so check for that first. If you want a second opinion, it's fairer to share your questions and the technical assumptions than the full document with prices.