Introduction to Request for quotations

In business processes, a request for quotations (or RFQ for short) is a document that precedes a purchase order. Based on this document, the supplier provides us with the purchase price, payment terms and delivery time for particular items or services.

In today’s dynamic business environment, monitoring such process can be confusing and can result in information being lost (or even wrong). One of the most common omissions is that you sent an email with an RFQ document and it ended up in your vendor’s SPAM folder. Since the supplier has not even responded to you, it is usually concluded that the supplier does not have the required items or simply does not have the time to respond to your request. Another omission is that often only prices are compared, while the delivery time is usually ignored. In practice, it is said that if the ordered goods have a lower price, the delivery time will be unexpectedly long. So the whole manufacturing process can wait for days and the costs will be much higher than the savings made because of a lower purchase price.

During the 2020 pandemic, delivery times in supply chains have lengthened. So, to order something that is cheaper from China makes no sense if it takes a couple of months to deliver. The occupancy of the transport capacities itself also led to an increase in delivery costs. Today we have to calculate with new delivery prices from delivery to delivery. What was valid a couple of years ago will certainly not be valid next year either.

Another parameter is the reliability of the supplier, ie. that the supplier respects the agreement we have reached.

What’s “scoring” in Request for quotations?

The very process of selecting the most optimal supplier is called scoring. The most common “scoring” parameters are:

  • purchase price of items/services;
  • delivery cost;
  • delivery time;
  • terms of payment;
  • supplier credibility.

Each company calculates scoring according to their needs. For example, the lowest price brings 10 points while the shortest delivery time is 20 points in scoring.

In ERPAG, we have managed to combine the process of selecting the most optimal procurement in one form in the simplest way.

Manual entry of Request for Quotation

request for quotation

The input form is divided into two parts, ie. two tables that are interactively linked. If you enter a new supplier in the table above, new columns will open in the table below where you can enter the price for each item. Also, if you change the price in the table below, the values in the table above will be updated.

Note: The supplier number limit is currently 10. While the item number doesn’t have any limitations.

The green block marks the lowest price. The red block marks the purchase price that is not entered (price = “0”). The purchase amount in the table above will have value only if all purchase prices for the appropriate supplier are entered.

If you have the supplier’s price, the purchase price will automatically be populated.

Each line in supplier table has it’s own status.

rfq status

“Accepted” and “Refused” are final statuses. You have to select them manually.

Fulfillment / backorder

You can generate RFQ automatically thorough the Fulfillment option (backorder)

fulfillment list

You can find more information about the fulfillment process on our blog:

generate PO

After you activate the bulk action option, one document will be formed – a request for quotation. The system will automatically suggest you the first 10 suppliers, and the purchase price will automatically be populated. But, only if there is a purchase price for that item in the supplier price list.

Note: Since one document will be generated, there is no point in adding all items. You will have to filter the items that logically belong to the order. In our example, we will order wooden profiles, therefore we will select only them.

Create RFQ in Report designer

report designer

In order to print or email the RFQ you have to form a document template as well. Since every company has it’s own needs, and, often, graphic standards, the best way is to create a suitable document template through the Report designer.

If you wonder how to create a document template in ERPAG, we have a blog that explains how:

request for quotation template

After selecting the document printout, we can select for which supplier are we printing the document.

print request for quotation

Note: If you want to email your document as a PDF attachment, the PDF document, for now, doesn’t have “form edit field” possibility. For filling in the PDF document, your suppliers can use Adobe Acrobat, MS Word, or another PDF Editor.

Email tracking of sent Request for Quotation

Each document that you EMAIL from ERPAG has a tracking possibility!

You can find more information on our blog:

There is a specific column in Suppliers table, that shows the email status.

status email

The system will automatically populate the email status, while you will manually adjust the basic status.

You can see the sent/receive time details in the “Emails” panel.

email timeline

ERPAG always offers its customers one step more than the industry standard. ERPAG automatically generates a link that you can send to your supplier, where they will independently enter prices, shipping costs, shipping days and payment terms.

online quotation link

The link has an expiration date built in, which value is automatically fulfilled from the “deadline” of the document.

Simply email the link to your supplier. After he opens the link, he will get a specific entry form.

online quotation link

The values that he will see, will be the values from the document. If you want to send it without prices, you must set the prices to 0 in the document first. If you have entered a Supplier SKU, then that SKU will appear in front of the product name. The form is completely “responsive” and will have a custom display on the mobile phone.

request for quotation mobile app

Supplier can edit the document as long as link doesn’t expire.

By default, the “Online quotation link” is already in the default template in Report Designer. Just like the QR code in the document header.

qr code on rfq

By scanning the document through the mobile device, you will get an opened page where you can enter the necessary data.

Note: We recommend that you send the link to the appropriate supplier. The form itself, due to its simplicity, does not require a username/password, the authorization is via link. Make sure to send the link only to the person who needs to enter the data in the form. The link is about 120 characters long and unique for each RFQ and each item in the supplier’s table, so only those who know the exact link can open the entry form.

FX currency and Request for quotation

ERPAG fully supports multi-currency. If you have another currency assigned to a supplier, the selection will include the Exchange rate entry, as well as the entry of prices in the supplier’s currency.

fx currency

Since your supplier probably doesn’t care about your local currency, when entering the data through the online quotation link, he will be offered an entry in his own currency.

foreign currency

Convert to purchase order

In order for an RFQ to become a Purchase Order, you have to first select one supplier. You will do that by marking the status as “Accepted”.

convert rfq to PO
convert rfq to po

After you activate the option on your right side, you will be able to create a Purchase order.

purchase order

Note: The prices in RFQ are without input tax. If there’s a need to enter the input tax, you can do that upon creating a purchase order.

After saving the purchase order, RFQ will have a status “Completed”.

purchase order list

Start NOW

Read More

Related Posts

ERPAG Change Log 04-10-2024

ERPAG Change Log 04-10-2024

We prepared a new set of changes that are already up and running in your databases! Backdating documents - you can now change the document date: You can now undo document actions (such as pack, receive, invoice, record...

read more
Connecting IoT devices

Connecting IoT devices

Welcome to the era of automation. We stand at the threshold of a new age where the majority of tedious and repetitive physical tasks will soon become obsolete. We anticipate automating approximately 37% of current jobs within the next decade, with the potential for...

read more