This article will give you more knowledge about the purchase requisition process. This table below will help you understand how the Purchase requisition process flow works, although you will find more detailed information below the table.

Submission of the Purchase Requisition

Once an employee realizes the need for goods or services, he requests that the items be purchased. Their next step would be to fill out a purchase requisition form with the information about the purchase they want to make.

Approval from the line manager

In the next step, the purchase requisition form is reviewed by the department's line manager and then approved. In addition to confirming the legitimacy of a purchase, the department's line manager must make sure it is within the amount it can spend.

Accounting of stocks by the inventory department

Requisition forms are then forwarded to the inventory department for checking against existing inventory. In the event that the requested materials are not in stock, they forward the request to the purchasing department.

Checking by the purchasing department

The purchasing manager is the person who processes the request. Upon receiving this form, the officer determines whether the goods or services are necessary for the company, ensures the validity of the purchase, and verifies the approval of the requisition. Furthermore, he verifies whether or not the requisition was signed correctly and authorized. The officer may fill out the form or return it to the requestor if some details are missing from the Purchase Request. It is necessary to reject a purchase request if it seems inappropriate or exceeds the applicable purchasing limits and send back the request with comments explaining why.

Issuing a purchase order

Once all approvals are obtained, a purchase order is generated and sent to the supplier. It is noteworthy that upon confirmation by the supplier, it becomes a legally binding document.

Order delivery and assessment

Following delivery, the receiving department verifies the goods and services for quality and quantity. For order confirmation, a three-way matching process examines the purchase order, order receipt, and invoice. By doing this, the finance or accounting team will only pay for the goods or services they have ordered and received, so nothing more will be charged. Warehouse or receiving teams handle returns if needed.

Invoice payment

Upon completion of the documentation requirements, the purchase order is closed. The finance department confirms the invoice from the supplier, enters it into accounts payable and pays according to its terms.