EDI 840 Request for Quotation
EDI 840 provides a standardized way for buyers to request quotes from multiple suppliers, streamlining the procurement process and facilitating efficient decision-making. In this guide, you'll learn about EDI 840 transaction sets.
What is an EDI 840?
The EDI 840, also known as the Request for Quotation (RFQ), is a transaction set used by buyers to request pricing, availability, and other terms for products or services from potential suppliers. This document initiates the quotation process, allowing the buyer to gather information from multiple suppliers before making a purchasing decision.
Key Functions:
- Requesting Quotes: The 840 outlines the specific products or services the buyer is interested in purchasing.
- Providing Detailed Specifications: The buyer can include detailed specifications, such as quantity, quality, and delivery requirements.
- Setting Deadlines: The buyer can specify a deadline for suppliers to submit their quotes.
What are the Key Elements of EDI 840?
Key information included in an EDI 840:
- RFQ Header Information
- Product/Item Information such as Description, Quantity & Price
- Buyer and Seller Information such as Buyer & Seller Identification
- Other Relevant Information such as Notes or Comments & RFQ Response Format
EDI 840 Use Cases
- Procurement: Buyers can use EDI 840 to solicit quotes from multiple suppliers for a specific purchase.
- Tendering: Governments and organizations can use EDI 840 to request bids for public projects or contracts.
- Reverse Auctions: Buyers can use EDI 840 to conduct reverse auctions, where suppliers compete to offer the lowest price.
How is EDI 840 Request for Quotation used?
- Buyer Sends EDI 840: The buyer sends an EDI 840 RFQ to one or more suppliers, requesting quotes for specific products or services.
- Supplier Reviews and Responds: The supplier receives the EDI 840, compiles the requested information, and responds with an EDI 843, providing pricing and other details.
- Buyer Reviews Responses: The buyer reviews the quotes received from different suppliers, compares them, and decides which suppliers to move forward with.
- Finalization: If the terms are acceptable, the buyer may proceed with an EDI 850 Purchase Order to confirm the order based on the agreed-upon terms. The seller can also send an EDI 997 Functional Acknowledgement in response to EDI 840.
Benefits of EDI 840
EDI 840 is a digital way for buyers to ask suppliers for quotes. It's faster and more accurate than doing it manually or over the phone. This helps businesses save time and money.
EDI 840 is also safer than other methods because it uses special technology to protect the information from being stolen or changed. This makes it a more secure way to share important data.
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