Purchase Requisitions: A Complete Guide to Process, Benefits & Best Practices

Imagine you work in the IT department, and you need new laptops. You can’t just buy them directly—you submit a purchase requisition form, specifying the quantity, specifications, and estimated cost. Once approved, the procurement team issues a purchase order (PO) to the supplier.

Purchase Requisition vs. Purchase Order

A purchase requisition (PR) is an internal approval document, while a purchase order (PO) is a legally binding document sent to a vendor. Think of it this way:

·         Purchase Requisition = Internal request for approval

·         Purchase Order = External contract with a supplier

How Does the Purchase Requisition Process Work?

A well-defined purchase requisition workflow helps businesses avoid unnecessary spending and ensures timely procurement. Here’s how it works:

·         Employee Submits a Request – Details such as item description, quantity, and estimated cost are included.

·         Manager/Finance Team Approves – The request is reviewed for budget compliance and necessity.

·         Purchase Order is Generated – If approved, a purchase order is created and sent to the vendor.

·         Vendor Processes the Order – The supplier fulfills the order, and the finance team handles payment.

Why is a Purchase Requisition Important?

Using a structured requisition process offers several advantages:

·         Prevents Unnecessary Spending – Every purchase is reviewed before approval.

·         Improves Budget Control – Ensures that all spending aligns with the company’s financial plan.

·         Enhances Procurement Transparency – Provides a clear audit trail for all purchases.

Common Challenges & How to Overcome Them

·         Approval Delays – Automate approvals using procurement software like ERP systems.

·         Compliance Issues – Standardize your purchase requisition template to meet company policies.

·         Lack of Visibility – Use cloud-based purchase requisition systems for real-time tracking.

Best Practices for a Seamless Purchase Requisition Process

·         Use automated procurement software to streamline approvals.

·         Set spending limits to prevent over-budget purchases.

·         Train employees on the importance of purchase requisition forms for compliance.

Final Thoughts

A well-optimized purchase requisition system simplifies procurement, controls costs, and improves efficiency. Whether you're a small business or a large enterprise, leveraging digital procurement tools can transform your purchasing process for the better.