Download these 60 Free Business Quotation Templates to help you prepare and print your own Business Quotation quickly and effectively.
Business Quotations, also known as RFQ (Request for Quotation), is a request that a company puts out when they hire contractors or manufacturers to perform a job. It is basically a way of encouraging the contractors to bid against each other. The company that issues RFQ then selects one of the betters to get the job. As a professional it is your responsibility to issue request for quotation to suppliers in order to get bids on parts and services needed for your organization. The suppliers are basically invited to submit a detailed bid on part or service which meets requirements as laid down in the request for quotation or RFQ. An RFQ can either be written or oral. Although oral is acceptable but written is preferred. If an RFQ is written then any special specifications or requirements will be in writing and the chances of supplier omitting or misinterpreting what is being requested will be smaller or non-existent.
Components of RFQ:
Some of the key components of RFQ that must be included in an RFQ:
- In the modern world, most of the communication between buyer and the supplier is through the electronic media.
- It is good to have a standard format for all RFQs for better management of all information.
- If the supplier is familiar with your format, their chance of missing an important information will be reduced.
- It must be simple and technical. Language in which it is written must be simple to understand by the supplier.
- Make sure your RFQ is efficient and effective.
Important Information in RFQ:
There is certain information that should be included in standard RFQ to make sure that the details of the request are communicated properly to the supplier:
- Issue date of the requisition.
- The due date of the bid from supplier. If multiple dates then the shipping schedule must be included. Part being requested.
- Description of the part, drawing number and revision level.
- Attach a copy of drawing.
- Description regarding special requirements such as packaging and shipping.
- Any additional information that help the supplier.
Suppliers whom RFQ Is Sent:
After the RFQ is created, the decision is made regarding what supplier the RFQ will be sent to. When making this decision the professional must consider:
- The goals of the parts to get it made properly.
- Cost must be included. It will help in eliminating the suppliers who mention the cost higher than the other suppliers.
- Lead Time. There may be some suppliers that due to the nature of their business need long lead time. At minimum, the purchase professional try to get 3 minimum valid days at every RFQ. In order to do this at least 5 to 7 suppliers should receive an RFQ for the part or service.
There are always exceptions to this rule. These exceptions must be handled differently. For example: If there are no responses to the RFQs at all then the purchase professional must identify why there is no response. May be the part is not in their scope of supply. There are also occasions when the supplier company feel that they do not have the capacity to take the orders. If any of these situations happen, the purchase professional must reach out to the supplier and try to work out through the issues if possible and then convince the supplier to bid.
In some of the industries the RFQ is very complicated. It is in the form of document with many attachments. Government purchase, for example, have a very long RFQ. This is necessary because the laws and rules involved in doing business by the government.
Review the Bids:
Once all the bids are returned from the supplier. Review each RFQ and understand what the suppliers have submitted.
- Make sure the bids are correct.
- Pricing is competitive.
- Specifications are met.
- If the supplier bid is not competitive, extremely low or extremely high, it is good idea to discuss bid with the supplier. May be they have made a mistake in typing the bid. May be they did not understand what you have requested.
- Bid deadlines can be extended if necessary.
An RFQ is tool to communicate with the supplier, the organization is interested to do business with. The supplier must submit a competitive bid to the specifications requested by the buying organization. An RFQ helps to communicate exactly what is exactly required by the organization to give the supplier all the information needed to submit a competitive bid to the buyer. The buyer should examine closely that who the RFQ will be sent to. An RFQ should be made in a manner that ensure that the competitive bids will be submitted from potential suppliers. An accurate RFQ is essential to get the correct price to the correct specification from the suppliers.
Free Quotation Templates
Given below are various type of quotation templates such as Business, Product, Price, Personal Auto Insurance, Sales, Services, Vehicle, Construction, Bid, Export, Painting job, Catering, Website, Graphic, Stock, Medical, Home Insurance, Custom etc