Knowledge Center

It is natural that some product types have a set price, independent of the buyer, while other customers are given a set price for specific product types. Offering different prices depending on product and customer is standard practice. This is mainly due to some customers being larger and expecting contractual prices on a larger product range, while smaller customers prefer to quote prices on a case-by-case basis, depending on the requirements set by their suppliers. This is standard practice across industries.

An example may be a large company which desires a contractual agreement, with price, payment terms and delivery terms. If we base the example on the rental car industry, one would have for example 10 cars set aside for a large customer to guarantee availability at all times and which has a set price for each day. In these cases it will not be necessary with a quoting process in an ERP-system as you can go directly to the sales order. One may also register the contract directly and retrieve the order from this.

In other instances, where the customer has a lower priority or needs customized products, one needs to follow the quoting process. This process is usually started with a request for quote, where the supplier checks availability of raw materials, price of raw materials, existing orders etc. This is a dialogue with the purchaser where conditions and prices are set based on the customer’s priority.

After an offer is given to the purchaser, there will be a period where the quote is open for accept or rejection. This period is usually set by the seller to limit the period to a minimum. Quotes open for an extended period may affect the sellers forecast and expected income negatively, especially if the quote will be rejected, as it has occupied resources for a long time. Any following agreements regarding changes in quotes and acceptance are logged in the ERP system, usually in the form of a new quote.