Most businesses overlook the importance of the Request for Quote or Request for Quotation step in the procurement process.
Why do we say RFQ is one of the important steps? We say it because this step gives an ability to make very precise decisions in procurement which helps prevent revenue leakage and also helps in other aspects like managing the delivery timelines and even fulfilling the delivery commitments to your customers.
Let’s understand what is RFQ, as the name suggests it’s a request for quotation that is to be sent to vendors/suppliers. When we are procuring goods/items/products we usually connect to the vendors and place the order by raising the PO or the Purchase Order, RFQ comes before the PO step, instead of directly sending the PO an RFQ is raised first and sent to multiple vendors this RFQ can have multiple attributes like the goods/items/products name, the quantity you want to buy, and the description of the goods/items/products.
In response typically you will get the prices and delivery timelines from your vendors in the form of Quotations or Estimate, these responses can then be aligned in a report format with which you will have a single view for which good/item/product can be brought from specific vendor depending upon the response like if some vendor is giving high price for one good/item/product however delivery is faster, so depending upon the need for your procurement you can choose a vendor for particular good/item/product like if delivery after certain time is ok then you can go with the lower price offering vendor who has longer delivery time response. If another vendor says he can deliver within a specified time period but the price is slightly higher than other vendors you can go with him as early delivery needs.
Following are some formats in which you can send the RFQ’s to your vendor and also capture their responses and compare, you can download the formats from the links below.
RFQ – Formats and Reports
The creation of RFQ, capturing responses, and then creating comparison reports can be automated using business automation tools, there are even more such aspects of business that are very important like RFQ which we can be automated, which in turn will help you grow your business and revenues. When you think you are ready to start your automation journey to take your business to next level do click and fill up the form below and our team will help you.
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– Vinnay Kulkarni