RFQ to PO: the procure-to-pay process explained

By the QuantProc team · Updated 21 October 2026

The procure-to-pay cycle at a glance

1. Indent (purchase requisition). A site or department asks for material or a service.
2. Budget check. Is there budget left for this item, project or cost centre?
3. RFQ. A request for quotation goes to several vendors with the specification, quantity, delivery place and date.
4. Quotes and comparative statement. Quotes are compared on landed cost: rate, taxes, freight, delivery time and payment terms.
5. Approval. The choice is approved under your delegation rules.
6. Purchase order. The PO is issued to the selected vendor.
7. Goods receipt (GRN). Stores record what actually arrived, its quantity and condition.
8. Vendor bill and three-way matching. The bill is matched with the PO and the GRN.
9. Payment. The approved amount is paid, with TDS deducted where applicable.

Where money leaks, and the control that stops it

Leak	Control
Buying beyond the budget	Hard budget check before PO release
Always buying from the same vendor	Minimum number of quotes per RFQ; recorded comparative statement
Paying for goods never received	Three-way matching: PO = GRN = bill
Paying a higher rate than agreed	Bill rate locked to PO rate; variance needs approval
Duplicate payment	One bill number per vendor per year; payment linked to bill
Rates creeping up over time	Price history by item across all projects

Writing a good RFQ

• Use a clear item description with make or specification, and say whether equivalents are acceptable.
• State the quantity and unit, the delivery address and the date needed.
• Ask for rates with taxes shown separately, plus freight, unloading and validity.
• State payment terms and any penalty for late delivery.
• Give a deadline for quotes.

Three-way matching explained

Before a vendor is paid, three documents must agree:

• Purchase order: what you agreed to buy, at what rate
• Goods receipt note: what actually arrived
• Vendor invoice: what the vendor is charging

If the invoice says 100 bags at ₹420 but the GRN shows 95 bags received and the PO rate was ₹410, the system pays for 95 bags at ₹410 and flags the difference. That single check stops a large share of over-payments.

Automating it

In QuantProc, the whole cycle runs in one system. Sites raise indents on the phone, the PO is blocked if it exceeds the remaining budget, and bills are matched to the PO and GRN before they reach accounts. With QuantProc Sourcing, RFQs go to verified, GST-registered sellers, and the winning quote becomes the PO.