Purchase Requisition
Summary Definition: An internal company document used to formally request and obtain approval for procuring goods or services, detailing necessary items and quantities.
What is a Purchase Requisition?
A purchase requisition is a formal, internal request that initiates the procurement of goods or services within an organization. It’s typically submitted by a team member or department to inform the procurement team or purchasing authority that a specific need exists.
This document launches the purchasing process and is essential in maintaining internal oversight and procedural compliance across business operations.
Key Takeaways
- A purchase requisition is an internal document that initiates the procurement process by formally requesting goods or services before any purchase order is issued
- Requisitions differ from purchase orders, which are external documents sent to a supplier formally authorizing a purchase.
- Implementing a standardized and automated purchase requisition system enhances transparency, reduces errors, and improves budget oversight across an organization.
Purchase Requisition vs. Purchase Order
Unlike a purchase order, which is a legal contract between a buyer and supplier, the purchase requisition is an internal control mechanism. For a purchase order to exist, a purchase requisition must first be submitted and approved. Thus, a purchase requisition isn’t a commitment to a supplier or vendor but an internal checkpoint for financial and compliance purposes.
Understanding the distinction between requisition vs. purchase order is fundamental for businesses looking to modernize procurement practices or evaluate the capabilities of an eProcurement provider.
Why are Purchase Requisitions Important?
At its core, a purchase requisition is an internal communication tool that translates functional needs into actionable steps. Employees use a purchase requisition form to specify what they need, why it’s needed, and how it aligns with current budgets or projects.
While form structure and specifics vary between organizations, many commonly include:
- A detailed description of the requested items or services
- Quantity and estimated cost
- The requesting department and associated budget item
- Relevant vendor information or supporting documentation
- Justification for the request
- Required delivery timelines
When finished, a submitted form is processed by the company’s purchase requisition system, which is often an automated workflow within a licensed or purchased procurement platform.
Purchase Requisition Benefits
A well-implemented purchase requisition process contributes directly to an organization’s financial discipline, which provides several operational benefits.
| Purchase Requisition Benefit | Benefit Details |
| Enhanced Transparency and Accountability | Requisitions provide a clear audit trail for all purchasing activity, allowing leadership to see who requested what, when, and why. This transparency curbs unauthorized spending and ensures that procurement decisions align with strategic priorities. By requiring formal approvals, requisitions also reinforce a culture of accountability. Teams are prompted to justify their needs, which deters impulsive or unnecessary expenditures and increases visibility for leadership. |
| Optimized Procurement Workflows | Standardizing requisition procedures simplifies the acquisition of goods and services. Whether the request is for office equipment or specialized services, consistent processes reduce delays and confusion. Automated workflows in a modern purchase requisition system ensure requests move smoothly from initiation to fulfillment without bottlenecks. |
| Budget Control Support | A requisition acts as an early filter in the spending process. Managers and financial stakeholders can review proposed purchases before committing funds, providing the opportunity to assess cost implications and alignment with existing budgets. This checkpoint helps prevent overspending and allows for course correction before money leaves the organization. |
| Minimal Procurement Errors | Errors in procurement can be costly and disruptive. Requisitions help minimize these risks by ensuring all necessary information is captured early. With clearer details and centralized documentation, purchase orders sent to vendors are more accurate, reducing the likelihood of incorrect deliveries or misunderstandings. |
| Stronger Vendor Interactions | A well-documented purchase requisition process enables more effective vendor communication. Suppliers receive clearer, more detailed requests, which supports accurate quoting and order fulfillment. Over time, this improves trust and consistency in supplier relationships. |
Purchase Requisition Best Practices
To fully benefit from a robust purchase requisition system, organizations should implement a few best practices.
- Standardize Requisition Forms: Uniformity in requisition submissions ensures all required details are consistently captured. This reduces the need for follow-up questions and accelerates the approval process.
- Set Clear Approval Workflows: Establishing approval hierarchies based on cost thresholds, departmental authority, or procurement categories helps streamline decisions while maintaining financial oversight.
- Implement Tiered Spending Limits: For high-value purchases, automated triggers should route requisitions to senior decision-makers. This prevents bottlenecks for routine purchases while preserving control for strategic or high-value acquisitions.
- Enable Guided Vendor Selection: While centralizing procurement is valuable, departments often have insights into which vendors best meet their needs. Allowing users to suggest vendors while adhering to company-wide compliance rules can improve results without sacrificing control.
- Leverage Automation Technology: Elite purchase requisition systems can automate workflows, integrate with existing business systems, and generate analytics to spot request trends or inefficiencies. Complete data visibility also enables better needs forecasting and vendor negotiations.
