In addition to the fact that Purchase Requisition is an internal document that controls the purchasing process and makes the purchasing process more manageable and transparent, here are some other significant benefits of Purchase Requisition.
Once a company centralizes its purchasing process and gets its employees involved, it is easier to organize and identify incoming goods and services. It also streamlines the inventory management process. A centralized purchasing system improves efficiency and speeds up the process by eliminating delays caused by individual departments.
A purchase requisition workflow consists of steps that add hierarchical approval levels, and the document is verified for validity and accuracy.
As a result of this workflow, you can demonstrate that a form was issued and submitted by a department. In addition, you can demonstrate that the department that requested the supplies had a business reason for requesting them. In most organizations, the purchase requisition includes the applicable budget and purchase limit, so the requestor is aware before making a purchase. This means that funds are available to make this purchase with this approval.
Employees are likely to commit fraud if there are no established protocols, such as ordering materials for their use or arranging with suppliers to steal. By issuing purchase requisitions, such types of fraud are avoided, and employees are prevented from ordering directly from suppliers without formal approval.
By sending purchase requests, the company can save time and money. Adding up your purchases gives you a better idea of what you're buying, which makes it easier for you to negotiate a better price with your suppliers.
In general, a purchase requisition is an evidence that certain materials were needed and ordered by a department, along with a record of the materials being delivered. Any future issues regarding the items ordered or the negotiated price can be resolved using this record.
In addition, as a purchase requisition includes all of the critical information about the requestor, the approver, the time of approval, and the approved materials, it can be used as evidence in audits.
By using purchase requisitions, you help the purchasing department to stay on top of what needs to be purchased and to avoid accidentally buying the same item twice.