What Is a Request for Quote (RFQ)?
A Request for Quote (RFQ) is a procurement process used by businesses to request pricing from one or more suppliers before committing to a purchase.
Instead of immediately creating a Purchase Order, an RFQ allows purchasing teams to:
- Compare supplier pricing
- Evaluate delivery times
- Assess supplier performance
- Negotiate better rates
- Maintain accurate purchasing records
In modern inventory management and ERP systems, RFQs form a critical part of the purchasing lifecycle and are considered an industry best practice for procurement management.
The Problem with Using Purchase Orders as Quote Requests
Many businesses still use Purchase Orders to request pricing from suppliers.
A typical process might look like this:
- Create a Purchase Order for Supplier A
- Create a Purchase Order for Supplier B
- Create a Purchase Order for Supplier C
- Wait for responses
- Delete the Purchase Orders you don’t need
While this may seem convenient, it creates significant operational issues.
Warehouse Planning Becomes Inaccurate
Purchase Orders represent committed purchases.
When multiple Purchase Orders are created simply to gather pricing:
- Warehouse teams see incoming deliveries that may never arrive
- Delivery schedules become inaccurate
- Resource planning becomes unreliable
Imagine creating 20 purchase orders to compare prices for a large project.
Your warehouse team may believe 20 separate deliveries are arriving next week and begin planning labour and storage accordingly.
In reality, only one supplier will be selected.
Supplier Performance Reporting Becomes Distorted
Most modern ERP systems track supplier KPIs such as:
- On-Time Delivery (OTD)
- On-Time In-Full (OTIF)
- Lead Times
- Supplier Reliability
Creating Purchase Orders that are later cancelled can negatively impact these metrics.
The result?
Management reports become less accurate and purchasing decisions become harder to make.
Procurement Audits Become More Difficult
When auditors review procurement activity, they want to see a clear separation between:
- Supplier enquiries
- Purchase commitments
Using Purchase Orders as quote requests blurs this distinction.
An RFQ process provides a clean audit trail that clearly shows:
Supplier Enquiry → Supplier Selection → Purchase Commitment
How RFQs Solve These Problems
The RFQ module in Turbo Inventory was designed specifically to separate supplier quotations from actual purchasing commitments.
Instead of creating multiple Purchase Orders, you:
- Create one RFQ
- Clone it to multiple suppliers
- Receive supplier responses
- Compare pricing
- Convert the selected RFQ into a Purchase Order
Only the chosen supplier progresses to the purchasing stage.
Example: Purchasing Tools for a Construction Project
Let’s say a construction company needs:
- 10 Claw Hammers
- 50 Safety Helmets
- 25 High-Visibility Jackets
The purchasing manager wants quotes from:
- Town Electric
- Global Tech
- ABC Industrial
- Construction Supplies Ltd
Traditional Purchase Order Method
The manager creates four separate Purchase Orders.
Problems immediately appear:
- Four incoming deliveries show in planning screens
- Supplier KPI reporting becomes skewed
- Staff cannot determine which order is real
- Unused Purchase Orders must later be cancelled
RFQ Method
The manager:
- Creates one RFQ
- Clones it to the remaining suppliers
- Sends all RFQs
- Receives pricing responses
- Selects the best supplier
- Converts that RFQ into a Purchase Order
Result:
- Cleaner workflow
- Better reporting
- Accurate warehouse planning
- Complete audit trail
RFQ Workflow in Turbo Inventory
The RFQ process follows a simple workflow:
Step 1: Create an RFQ
Select:
- Supplier
- Products
- Quantities
- Delivery location
- Currency
Step 2: Clone for Additional Suppliers
Rather than re-entering information repeatedly, simply clone the RFQ and assign a different supplier.
This allows purchasing teams to request quotes from dozens of suppliers in minutes.
Step 3: Receive Supplier Pricing
Suppliers respond with:
- Unit costs
- Lead times
- Delivery charges
- Payment terms
Step 4: Compare Suppliers
Evaluate suppliers based on:
- Price
- Availability
- Delivery performance
- Historical reliability
Step 5: Convert to Purchase Order
Once a supplier is selected:
Convert RFQ → Purchase Order
All details automatically transfer.
Multi-Currency Purchasing Support
Global businesses often purchase from suppliers in different currencies.
Turbo Inventory supports:
- EUR
- GBP
- USD
- Other international currencies
Exchange rates entered at the RFQ stage flow automatically through:
- Purchase Orders
- Goods Receipts
- Supplier Invoices
This reduces manual data entry and improves financial accuracy.
Project-Based Purchasing
Many industries purchase stock against specific projects.
Examples include:
- Construction
- Engineering
- Manufacturing
- Events
- Rental and Hire Companies
RFQs can be linked directly to projects, ensuring procurement costs remain traceable throughout the project lifecycle.
Industry Best Practice: RFQ vs Purchase Order
Procurement professionals generally agree that:
| Process | Best Practice |
|---|---|
| Requesting supplier pricing | RFQ |
| Committing to a purchase | Purchase Order |
| Receiving stock | Goods Receipt |
| Processing supplier costs | Supplier Invoice |
Using dedicated RFQ software aligns your business with recognised procurement standards and creates cleaner operational processes.
Full Procurement Traceability
One of the biggest advantages of a dedicated RFQ process is complete traceability.
Turbo Inventory tracks:
RFQ → Purchase Order → Goods Receipt → Supplier Invoice
This provides:
- Audit compliance
- Purchasing visibility
- Supplier performance tracking
- Accurate management reporting
Why Businesses Are Moving Towards RFQ-Based Procurement
Companies adopting structured RFQ workflows typically see:
- Better supplier pricing
- Improved supplier accountability
- More accurate warehouse planning
- Cleaner procurement reporting
- Reduced purchasing errors
- Stronger audit trails
Most importantly, they avoid turning their Purchase Order system into a quotation management tool it was never designed to be.
Final Thoughts
If your team regularly requests pricing from multiple suppliers, a dedicated Request for Quote (RFQ) process is the correct procurement workflow.
Rather than creating multiple Purchase Orders and cancelling the ones you don’t need, RFQs provide a cleaner, more professional, and more auditable approach to supplier management.
By separating quotation activity from purchasing commitments, businesses gain better visibility, more accurate reporting, and stronger supplier relationships.
For organisations looking to improve procurement efficiency, implementing an RFQ process is one of the simplest and highest-impact changes they can make.
