How to compare supplier quotations before purchase approval

1. Start with the request the suppliers received

A comparison needs a reference point. Keep the approved request for quotation (RFQ), its revision, required quantities, specifications, delivery location and required date together. Match every supplier response to that request. A revised drawing or changed quantity can make an earlier quotation unsuitable for the current decision.

Give each requested line a stable reference. Record an offered alternative against that line, with the difference visible. Similar product names do not establish that two parts have the same material, dimensions, certification or operating requirements. Assign technical questions to the person who can confirm suitability.

Check the purchasing tools you already use. Microsoft's Dynamics 365 RFQ documentation describes requesting prices, delivery times, incidental charges and discounts, then comparing replies. An existing RFQ module or a structured response form may remove much of the copying without a custom AI build.

2. Capture what each supplier actually offered

Use one comparison record per supplier and requested line. Preserve the source document, quotation number, version, date and page or email reference. The reviewer should be able to open the evidence behind a value without searching the inbox again.

• Item: requested reference, offered part or specification, and any substitution.
• Quantity: offered quantity, unit of measure, pack size and minimum order.
• Price: currency, price basis, discounts and quoted line total.
• Other costs: freight, tooling, setup or other stated charges, plus the quoted tax treatment.
• Delivery: lead time, the event that starts it, any stated arrival date and delivery location.
• Terms: validity date, payment terms, exclusions and conditions that need approval.

Use an explicit “not stated” value when a term is absent. A blank freight charge is not evidence that delivery is free. Keep conflicting values unresolved: if an attachment says six weeks and the covering email says four, show both references and ask for clarification.

If AI extracts the fields, use permitted records and agree the processing location and access first. Our data and access guide covers the questions to settle before connecting documents or business systems.

3. Separate quoted values from comparison calculations

Keep two sets of values: what the supplier wrote and what you calculated for comparison. Record the rule behind each calculation. Converting a pack price into a unit price should not overwrite the original pack size or hide a minimum order.

Microsoft's RFQ comparison procedure explicitly includes offered quantity, net amount and deviation from the requested receipt date. The offered quantity can differ from the requested quantity. Check those differences before ranking prices.

For a draft comparison, apply the purchasing team's agreed rules:

• Convert units only when the conversion and specification are confirmed.
• Show the payable order quantity as well as the required quantity.
• List included and excluded charges; leave unknown totals unresolved.
• Keep currencies separate unless an authorised rate and date have been supplied; label converted totals with both.
• Compare delivery promises on the same basis. Dispatch in four weeks does not establish arrival in four weeks.

Do not combine unlike tax treatments or assume charges are recoverable. Ask the responsible finance or purchasing person to define the comparison basis. The workflow can apply that rule once agreed.

4. Check the quantity before choosing the lower price

If either offer instead excluded delivery or lacked a confirmed arrival date, mark that gap before comparing the order totals. Keep the request, assumptions and calculations together so another reviewer can reproduce the result.

5. Prepare a decision draft with unresolved questions

A useful draft puts the requested lines, offered terms, comparison calculations and exceptions together. Name the owner of each unresolved question and show whether it prevents approval. Keep technical suitability, commercial review and purchasing authority explicit.

Document extraction scores can help route uncertain fields. Microsoft's Document Intelligence confidence guidance describes estimated confidence values and human review; not every field has a score. A confidence score does not answer whether an alternative part is acceptable or a missing charge has been agreed.

Require source checks for the fields that determine the commitment: item, quantity, currency, price basis, charges and delivery terms. Route unreadable scans, unmatched items, expired quotations and contradictory terms for review. Agree any automated acceptance thresholds using representative documents and the consequences of an error.

For an initial pilot, stop at a reviewed comparison draft. Creating or sending a purchase order is a separate action with its own permission and approval rules. Preserve the manual route when extraction or a system connection fails.

6. Test one purchasing workflow before expanding

Choose one repeatable category of purchases and collect authorised RFQs with their supplier replies. Include pack pricing, partial quantities, alternate parts, revised quotations, missing freight and unclear delivery wording. Have the process owner record the expected fields and exceptions for each test.

Measure active time from receiving replies to an accepted comparison, including corrections and clarification work. Track incorrect fields, missed exceptions and the share of comparisons that remain manual. Keep time waiting for suppliers separate. A faster extraction step only helps if the complete review becomes easier.

Confirm where the draft belongs in your existing spreadsheet or purchasing system, who reviews it and how revised replies replace earlier versions. Start with read access and draft output where practical; test that retries do not create duplicate records.

Our first-workflow checklist helps decide whether this is the right pilot. All Squares starts with a free discovery call, followed by the Free AI Opportunity Audit to identify one or two priorities. Builds are scoped and quoted separately. Bring a repeated quotation comparison to discovery, with permitted sample inputs and the checks your team needs.

Questions before automating quotation comparison

Can we start with a spreadsheet?

Yes. A shared field list, source references and agreed comparison rules can be tested in a spreadsheet first. Use your existing purchasing module when it already supports the process. Consider AI extraction when variable documents leave a repeated reading and copying task.

Should the workflow automatically choose the cheapest supplier?

Keep selection with the authorised purchasing owner during the pilot. Price, required order quantity, technical suitability and delivery constraints can point to different choices. The draft should make those differences visible and record the reason for the approved decision.