How to Create an RFQ (Request for Quotation)

How to Create an RFQ (Request for Quotation): A Quotation is a formal document from a supplier stating the price, terms, and conditions for supplying goods or services. It is a critical step between raising a Purchase Requisition and issuing a Purchase Order.

Types of Quotations

Quotation Process Flow

PR Approved → RFQ Sent to Suppliers → Quotations Received → Comparison → PO Issued

How to Create an RFQ (Request for Quotation)

Step-by-Step Process

Step 1 — Identify the Need

• Refer to the approved Purchase Requisition
• Confirm item specs, quantity, and delivery requirements

Step 2 — Shortlist Suppliers

• Select 3–5 qualified vendors from your approved supplier list
• New vendors must be registered/validated first

Step 3 — Prepare the RFQ Document Include the following in your RFQ:

• Company name & contact details
• RFQ number & issue date
• Response deadline
• Item description, specifications, quantity, unit of measure
• Required delivery date & location
• Payment terms expected
• Terms & conditions
• Instructions for submitting quotation

Step 4 — Send RFQ to Suppliers

• Send via email, supplier portal, or procurement system
• Set a clear deadline (typically 3–14 days)

Step 5 — Receive & Evaluate Quotations

• Collect all responses before the deadline
• Compare on: price, delivery time, quality, warranty, payment terms

Step 6 — Select Best Quotation

• Use a Quotation Comparison Sheet (also called Comparative Statement)
• Get approval if required by policy

Step 7 — Issue Purchase Order

• Convert the selected quotation into a PO
• Notify unsuccessful suppliers (good practice)

Also Reads:

🚀 Enroll in Live SAP Courses:

🎓 SAP MM (Material Management)

🎓 SAP PM (Plant Maintenance)

🎓 SAP SD (Sales and Distribution)

SAP MM Procurement Process Explained: PR → RFQ → PO (Beginner Friendly)

Learn more…..

Originally published at https://mukeshkblog.com on April 24, 2026.