Purchase requisition
An internal request from an employee to buy something, sent for approval before a purchase order is placed.
In short
- It is internal. The supplier never sees it.
- Once approved, it usually becomes a purchase order.
- It checks the budget before money is committed.
A purchase requisition is how an employee asks the business to buy something. It describes what is needed, the quantity, the estimated cost, the preferred supplier if there is one, the budget or cost centre to charge and the reason for the purchase.
Requisition versus purchase order
The requisition is an internal document: a request for permission. The purchase order is external: a commitment sent to the supplier. The usual flow is requisition, approval, then purchase order, often created automatically from the approved requisition by procurement.
Why businesses use them
- Budget control: the budget owner approves spending before it is committed, not after an invoice arrives.
- Better buying: procurement can direct the purchase to a contracted supplier or combine similar requests.
- Audit trail: the record shows who asked for the purchase, why, and who approved it.
Keeping them useful
Requisitions that take days to approve push people toward cards and maverick spend. Catalogues for common items, automatic approval for small amounts within budget and mobile approvals all keep the process fast enough that people use it.
Worked example
A requisition for new monitors
A team lead requests eight 27-inch monitors, estimated at $340 each, charged to the Design cost centre. The requisition goes to the design director, who approves it within an hour. Procurement converts it to a purchase order with the contracted IT supplier at $312 each, $224 less than the estimate.