What Is Purchase Requisition?

Purchase Requisition Explained

The requisition is the control point between wanting something and committing company money. It records what is needed, quantity, required date, suggested supplier, estimated cost, and the general ledger account or project to be charged. Because it is internal, it creates no legal obligation. That distinction is the entire reason the document exists: it lets an organization apply approval and budget checks before any commitment becomes binding, and it separates the requester from the person authorized to obligate the company.

Approval routing is typically driven by a matrix of value thresholds, department, commodity or category, and sometimes project. A 500-dollar consumable might auto-approve, a 50,000-dollar tool might require a plant manager and a controller, and anything capital might route to a separate authorization workflow. Well-designed matrices keep the number of routing rules small and the escalation logic obvious. Overly granular matrices are the most common cause of requisitions stalling for days with nobody able to explain who holds them.

MRP-generated requisitions are a special case. When the planning engine produces a purchase suggestion, most ERPs can convert it directly into a requisition carrying the calculated quantity and date. This preserves the audit trail from demand to commitment, which is valuable in government-contract environments where cost allocability must be demonstrable. It also means requisition volume is a direct function of lot sizing rules, so an item with lot-for-lot ordering and daily demand generates a lot of paperwork unless orders are consolidated.

Requisitions also drive procurement performance analytics. Time from requisition creation to approval, approval to purchase order, and purchase order to receipt are three separate cycle times with different owners. Organizations that measure only the total often conclude their buyers are slow when the actual delay sits in approval queues. Splitting the measurement usually redirects the improvement effort within a week.