How to Compare Supplier Quotes: Price, Lead Time, Payment Terms

Put every quote on the same basis, weigh price against lead time, payment terms and risk, and write down why the winner won.

Glass-style illustration of three warehouses, each with a quote tag, linked by lines to one panel comparing them side by side in three columns, between a calculator and a clock.

By RequisitionPro Team 9 min read

In this article

Quick answer: To compare supplier quotes fairly, first put them on the same basis: the same specification, quantity, currency, delivery terms and validity. Then weigh the total landed price against lead time, payment terms and risk, using weights you agree before you open the quotes. Finally, write down in one or two sentences why the winner won, especially when it is not the cheapest.

Why comparing quotes goes wrong

In many small teams, quotes are collected the same way. Someone emails three suppliers, the replies come back as PDFs, photos and WhatsApp messages, and the buyer scrolls through an email chain trying to line them up. One supplier quotes per carton, another per piece. One includes delivery, another does not. One quotes in dollars. One quote expired last week.

When the quotes are not lined up, the decision tends to fall back on the bottom-line figure on each page, and the cheapest-looking quote wins. That can be the wrong call. The Chartered Institute of Procurement and Supply (CIPS) describes whole-life costing as an estimate of the end-to-end cost of buying a product, covering things such as delivery, installation, operating costs and maintenance on top of the purchase price. The United Nations Procurement Manual puts it plainly: best value for money should not be equated with the lowest price.

The second problem is memory. Six months later, an auditor or a new finance manager asks why you paid more than the lowest quote. If the reason lives only in the buyer's head, nobody can answer.

How to compare quotes like for like

1. Check that every supplier quoted for the same thing

Read each quote line by line against what you asked for. Look for:

Specification: same model, size, grade or service scope. A cheaper printer without duplex printing is a different product.
Quantity and unit: convert cartons, packs and dozens to the unit you asked for.
What is included: delivery to your site, installation, VAT, warranty, training. Write any extra cost on the line so you compare the landed total (the full cost of getting the goods to you), not the headline price.

If a quote is missing something, ask the supplier to confirm in writing rather than guessing.

2. Convert every quote to one currency, on one stated date

Quotes in US dollars and naira cannot be compared until you convert them. Pick one rate, use it for every foreign-currency quote, and write the rate and its date beside your comparison. The Central Bank of Nigeria publishes an official exchange rate for each day, so it is a sensible, checkable reference.

Remember that the rate can move between the day you compare and the day you pay. A dollar quote that looks cheaper today may cost more by the time the invoice is settled, so treat currency as part of the risk you weigh, not just a conversion step.

3. Note validity, lead time, payment terms and delivery

Validity: the date until which the supplier will honour the price. A quote that expires before your approval is done may need to be re-confirmed.
Lead time: how many days from order to delivery. Compare it with the date you actually need the goods.
Payment terms: "30 days after delivery" and "100% upfront" are very different for your cash flow and for your leverage if something goes wrong.
Delivery: where and how the goods arrive, and who carries the cost.

4. Agree the weights before you open the quotes

Decide how much price, lead time, payment terms and risk matter for this purchase before you look at the numbers. That stops anyone shaping the criteria to suit a favourite supplier. UK public procurement guidance follows the same principle: it says award criteria, and their relative importance where there is more than one, are published before tenders come in, and that tenders do not have to be awarded on lowest price. The UN Procurement Manual likewise asks for the evaluation criteria to be set out in the solicitation, in descending order of importance. Your business is not bound by those rules, but the habit protects you in the same way.

For a routine buy, price might carry most of the weight. For something urgent, such as a replacement generator part, lead time may matter more than a small saving.

5. Score, decide and write down why

Score each supplier against the agreed weights, choose the winner, and record the reason in a sentence or two. The UN Procurement Manual expects decisions to be made in an accountable and transparent manner. For a private company, that simply means the next person can see what you compared and why you chose.

A worked example: comparing three quotes (illustrative)

A Lagos company (illustrative) needs 40 office chairs within three weeks. Three suppliers quote. All figures, names and the exchange rate below are illustrative.

	Supplier A (illustrative)	Supplier B (illustrative)	Supplier C (illustrative)
Unit price as quoted	₦145,000	₦132,000	US$95
Total for 40 chairs	₦5,800,000	₦5,280,000	US$3,800 = ₦5,700,000 at an illustrative ₦1,500 per US$1
Delivery to site	Included	₦150,000 extra	Included
Landed total (naira)	₦5,800,000	₦5,430,000	₦5,700,000
Lead time	7 days	25 days	45 days
Payment terms	30 days after delivery	100% upfront	50% upfront, balance on delivery
Quote valid for	30 days	14 days	7 days
Warranty	1 year	6 months	2 years

Supplier A (illustrative)

Unit price as quoted: ₦145,000
Total for 40 chairs: ₦5,800,000
Delivery to site: Included
Landed total (naira): ₦5,800,000
Lead time: 7 days
Payment terms: 30 days after delivery
Quote valid for: 30 days
Warranty: 1 year

Supplier B (illustrative)

Unit price as quoted: ₦132,000
Total for 40 chairs: ₦5,280,000
Delivery to site: ₦150,000 extra
Landed total (naira): ₦5,430,000
Lead time: 25 days
Payment terms: 100% upfront
Quote valid for: 14 days
Warranty: 6 months

Supplier C (illustrative)

Unit price as quoted: US$95
Total for 40 chairs: US$3,800 = ₦5,700,000 at an illustrative ₦1,500 per US$1
Delivery to site: Included
Landed total (naira): ₦5,700,000
Lead time: 45 days
Payment terms: 50% upfront, balance on delivery
Quote valid for: 7 days
Warranty: 2 years

The weights were agreed before the quotes were opened: price 50, lead time 20, payment terms 15, risk 15 (warranty, currency exposure and how soon the quote expires).

Price score = lowest landed total ÷ this supplier's landed total × 50.
Lead time score = fastest lead time ÷ this supplier's lead time × 20.
Payment terms and risk use a simple scale the team agreed in advance (illustrative). Payment terms: 30 days after delivery = 15, 50% upfront = 8, 100% upfront = 3. Risk is the sum of three parts: warranty (2 years = 6, 1 year = 3, 6 months = 0), currency (naira = 5, foreign currency = 2) and quote validity (30 days = 4, 14 days or less = 1).

Criterion (weight)	Supplier A	Supplier B	Supplier C
Price (50)	46.8	50.0	47.6
Lead time (20)	20.0	5.6	3.1
Payment terms (15)	15	3	8
Risk (15)	12	6	9
Total (100)	93.8	64.6	67.7

Supplier B is the cheapest, but it needs full payment upfront and cannot deliver within three weeks. Supplier C misses the deadline by a wide margin and carries currency risk. Supplier A wins.

The decision note might read: "Awarded to Supplier A. It is about 7% (₦370,000) above the lowest landed total, but it is the only supplier that delivers within the three-week deadline, it offers 30 days' credit, and its warranty is longer than the cheapest quote's. Supplier C converted at an illustrative ₦1,500 per US$1, rate date recorded."

Copy the two tables into a sheet and change the weights to suit each purchase. If you score suppliers on delivery and quality after the order, keep that separate; our guide on how to manage suppliers covers a simple scorecard. If you are not sure a quotation is even the right request to send, see RFQ vs RFP vs RFI.

How RequisitionPro helps

You do not need software to compare three quotes well; the steps above work in a spreadsheet. Where teams struggle is collecting quotes in one place, keeping them comparable and keeping the reason on record. RequisitionPro's Request for Quotation (RFQ) feature is built for that. RFQ is available on paid plans; the Free plan shows an upgrade message instead.

Quotes scattered across email. You can invite up to 25 vendors to an RFQ. Each one is emailed a private link and submits the quote without creating an account or logging in. The quotes land in the RFQ rather than in someone's inbox.

Lining the quotes up. The Compare quotes screen puts the vendors side by side, item by item. It labels the lowest price on each line, the lowest total and the fastest lead time, and shows each vendor's valid-until date, payment terms and notes underneath, so the trade-offs in the example above are visible at a glance. Quotes in other currencies are shown converted to your company currency. Those converted amounts use exchange rates that can change, so treat them as approximate and still note the rate and date you rely on.

RequisitionPro Compare quotes screen for an RFQ for office printers, with three vendors side by side, the lowest price per line, the lowest total and the fastest lead time labelled, and rows for lead time, valid-until date, payment terms, notes and attachments, with an Award button per vendor

Recording why. When you award a vendor that is not the lowest bidder, a reason is required before you can continue. You can also choose to send the other vendors who quoted a courteous message; it does not name the winner or reveal any prices.

RequisitionPro award dialog for Prime Office Solutions, which is not the lowest bidder, showing the quoted total, a note that the award creates a draft requisition and no purchase order yet, a required reason field, a ticked option to notify the other vendors, and an Award and create requisition button

Keeping the approval in place. An award does not create a purchase order. It creates a draft requisition, filled in from the winning quote, which then goes through your normal approval workflow. Once the requisition is approved, a purchase order can be created from it in the usual way.

Where to see it: the section "Not sure who to buy from? Request quotes first" in the onboarding guide shows how an RFQ fits before the requisition.

How many quotes should I get? There is no single right number. Set a minimum in your purchasing policy, scaled to the value of the purchase, and record why if you received fewer.

What if a quote expires before the purchase is approved? Ask the supplier to confirm in writing that the price still stands, or to send an updated quote, before you place the order.

The exchange rate moved after we chose a dollar quote. Do we compare again? If the change is large enough to alter the ranking, yes. Re-run the comparison at the new rate, note both rates and dates, and record the outcome.

Should the cheapest quote win when everything else is equal? Yes. If the quotes match on specification, lead time, terms and risk, price decides, and the note can be one line.

Next step

Watch the "Request for Quotation" video (3:57) on our tutorials page to see how quotes are collected, compared and awarded in RequisitionPro.

Sources

These references are provided for general information and open in a new tab. Rules and practice differ by country and by organisation, so check the requirements that apply to you. This article is not legal, tax or financial advice.