Supplier Quotation

A supplier quotation is a genuine document issued by a potential supplier, stating the recommended terms and prices, as well as the availability of specific goods or services that the supplier can deliver within a certain period. It also acts as a formal offer of the supplier to the buyer and makes the buyer freely consider the multiple offers before deciding to make a purchase.

A Supplier Quotation may also contain important commercial terms (together with price information), such as:

Terms of Sale: Delivery schedule terms, transport options, and other logistics arrangements.
Payment Terms: This section includes details such as payment options, credit terms, and due dates.
Warranties or Guarantees: Product quality guarantees, replacement terms, and service support.

If a buyer is satisfied with a Supplier Quotation, it can be made a binding agreement on both sides, and the subsequent purchase order and procurement process can be based on it.

Buying Flow

To view the Supplier Quotation feature in ERPNext:

Home > Buying > Purchasing > Supplier Quotation

1. Prerequisites

For ease of processing, you should first create the following records in the system before using and generating a Supplier Quotation:

Supplier
Item

2. How to create a Supplier Quotation

2.1 Supplier Quotation from Material Request

An existing Material Request can be used as the basis for a Supplier Quotation in ERPNext. This comes in handy when you already have a formally documented need for goods or services and want to get suppliers' formal pricing quotes based on the request.

The process can be initiated, in the following ways:

From a Material Request: Using the Create menu in the Material Request, create a Supplier Quotation. This allows transferring all relevant item data including names and quantities and specifications to be transferred automatically. (Note: The phrase in your original document says "Supplier Quotation from Material Receipt", but the proper process in the current ERPNext version is from Material Request, not Material Receipt.)
From the Supplier Master: Please access the master record of the desired Supplier and add a new Supplier Quotation directly to it.
Through Supplier Self-Submission: If your suppliers are able to use ERPNext's supplier portal, they can submit the quotations directly using the system. For details on supplier submissions, see the Request for Quotation documentation in ERPNext.

2.2 Creating a Supplier Quotation manually

You may also manually generate a Supplier Quotation not tied to a Material Request. You can use this for individual purchases, engage in direct discussions, or obtain quotes from sources other than the ERPNext platform.

To create a new Supplier Quotation:

1. Navigate to Buying > Purchasing > Supplier Quotation > New.
1. Choose the Supplier who made the quotation.
1. If Supplier[s Address and Contact Details are already saved in the Supplier Master, ERPNext will automatically bring them into the form.
1. Put the Item Code of the product or service.
1. Define the Quantity needed.
1. The Rate will be pulled automatically if you have defined a Standard Buying Rate for the item in the Item Price record.

Supplier Quotations are particularly convenient when the same product can be supplied by different vendors. In that situation, companies usually issue a Request for Quotation (RFQ) to various suppliers and document their quotations. This allows:

Price Comparison: Comparatively assess and evaluate supplier prices before a buying decision.
Audit Compliance: Maintain clarity over the record that indicates that it was an equal opportunity to quote all suppliers.

Nonetheless, for low-value items or small businesses, Supplier Quotation recording might not always be required. It is essential to balance the administrative cost of recording and obtaining quotations with their true value. As an excellent practice, only record Supplier Quotations when making high-value or strategic procurements where price comparison and documentation are essential.

3. Features

3.1 Taxes and Charges

If your supplier charges extra fees like taxes, freight, insurance, or other charges, you can report them in the Taxes and Charges field of the Supplier Quotation. Placing them there makes sure that your final landed cost is correctly calculated, providing you with an accurate picture of the cost of the goods beyond the initial price of the products.

When some specific charges are taken into account when thinking about the valuation of the product for instance, import duties or freights that raise the realistic inventory valuation you need to mark them down in Taxes table. This will make sure that the system takes adequate account of these costs in your company stock valuation.

In addition, ERPNext can save your time with the help of pre-made tax templates. Instead of having to manually enter tax information on every line, one can select a Purchase Taxes and Charges Template that will automatically apply the right tax rules and percentage and calculate the tax in the right way.

To learn how to generate and maintain tax templates on a step-by-step basis, see the documentation of the Purchase Taxes and Charges Template in ERPNext.

3.2 More

The Supplier Quotation document has a number of extra fields to assist in capturing and recording all relevant information of the quotation for future reference. These are:

Tax Category: This specifies the tax classification applicable to the purchase. If a tax category is already defined in the Supplier Master, ERPNext will automatically add it to the quotation.
Shipping Rule: It enables you to specify how shipping charges are computed and added to the order.
Purchase Taxes and Charges Template: Allows you to instantly apply default tax structures.
Discount: Tracks any discounts provided by the supplier, in percent or amount.
Terms and Conditions: Tracks the supplier's contractual terms concerning payment, delivery, returns, warranties, etc. (The items followed here are the ones provided by the supplier, not by your organization.)
Quotation Number: A reference number provided by the supplier and is designed to identify his or her quotation.
Printing Settings: Let you decide how the Supplier Quotation would look in its printed form.

Note:

Tax Category will be retrieved automatically from the Supplier Master if it is defined there.
Printing Settings are not used for formatting the printed form, only for modifying the stored form.
The Terms and Conditions documented here must be identical to those offered by the supplier.
You may associate a Supplier Quotation with a particular Material Request by clicking the "Link to Material Requests" button on the form.

3.3 After Submitting

Once you inspect and submit a Supplier Quotation in ERPNext, you can directly initiate further actions to advance the procurement process. The following documents may be generated upon submission:

Purchase Order: If you are in agreement with the quoted prices, terms, and conditions from the supplier, you may upgrade the Supplier Quotation into a Purchase Order. This saves you from having to rekey data since all applicable information in the quotation will automatically be brought forward.
Quotation: If you are selling goods or offering a service to your customers, you can utilize the supplier's quotation to draft a Quotation for the customer. This ensures that you correlate supplier prices with your selling price before finalizing the transaction.
Auto-repeat: You can also set the supplier quotation to auto-repeat on regular basis in case this is a recurrent requirement in your purchases such as monthly consumable supply or you make regular revamping of your inventory. This would minimize physical efforts and will keep the supplier involved on a continuous basis as it would automatically resume recreating the quotation at an appropriate time.