What is a Purchase Requisition? | Meaning, Purpose, Format

Every department in a company will inevitably need materials at some point - whether it is for office supplies, raw materials, equipment, or services. Direct ordering from suppliers by line managers or departmental managers can increase expenses and fraud cases. Staff working in good faith can sometimes violate budget limits or requirements without realizing they are doing so.

As a result, many companies make their purchasing processes easier with clear approval workflows. Implementing an effective purchasing process can help reduce unnecessary expenditures. It all begins with a Purchase Requisition.

What is a Purchase Requisition?

Purchase requisitions are internal forms used by employees to order goods or services for their companies. Companies may need to purchase these items for business operations (such as office supplies), inventory, or manufacturing inputs.

Important Note: Creating a purchasing audit trail begins with the purchase requisition submission to the purchasing department. In order to get the requested goods or services, a purchase order needs to be approved by the purchasing department.

Contents of a Purchase Requisition

Here are the contents that Purchase Requisitions include:

  • Name and department of the requestor
  • Request date
  • The list and quantity of goods or services that are requested
  • Description, reason and price of goods or services
  • The legal name of the supplier

How does the Purchase Requisition process work?

Here you will see the specific stages of what the procurement workflow looks like:

  • Submission of the purchase requisition form
  • Approval from the line manager
  • Stocktaking by the inventory department
  • Screening by purchasing department
  • Generating a purchase order
  • Order delivery and assessment
  • Invoice payment

We have prepared this flowchart for you to understand more easily how the Purchase Requisition process works.

Benefits of a Purchase Requisition

The main benefit of Purchase Requisitions is that it is helpful for maintaining internal control over the purchasing process, preventing fraud, ensuring transparency, and creating an audit trail.

Here are more benefits of issuing Purchase Requisitions such as:

  • Simplifying the purchasing process
  • Making the purchasing process clear
  • Fraud prevention
  • Helps save you money and time
  • Helps the company in the audit process and increases safety
  • Multiple orders prevention