What Is Purchase Requisition?
Also known as: requisition, purchase request, PR
Definition
A purchase requisition is an internal request to procure goods or services, routed for approval against budget and authority limits before a buyer sources it and converts it into a purchase order sent to a supplier.
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.
Why It Matters
- The requisition is where spend control is actually enforced, before any commitment to a supplier becomes binding.
- Separating requester from buyer is a core segregation-of-duties control that internal and external auditors specifically test.
- Requisition-to-order cycle time is often the hidden bottleneck behind late material, not supplier performance.
- In government and defense contracting, the requisition trail supports demonstrating that costs are allocable to a specific contract.
In Practice
A frequent gotcha: an approver goes on leave with no delegate configured, and requisitions queue silently behind them. Nobody notices until a shortage. Configure delegation and an escalation timer on every approval step, and run a weekly aged-requisition report so anything pending more than two business days is visible to procurement leadership.
Frequently Asked Questions
What is the difference between a requisition and a purchase order?
A purchase requisition is an internal request with no legal force, used to obtain approval and budget clearance. A purchase order is an external document sent to a supplier that creates a binding commitment once accepted. One approved requisition may produce several purchase orders, or several requisitions may be consolidated into one order with a preferred supplier.
Can MRP create purchase requisitions automatically?
Yes. Most ERPs let planned purchase orders generated by MRP be converted into requisitions carrying the calculated quantity, need date, and suggested supplier. This preserves the audit trail from demand through to commitment. The trade-off is volume: aggressive lot-for-lot policies on frequently used items can flood the approval queue unless orders are consolidated first.
Related Terms
Three-Way Match
A three-way match is the accounts payable control that compares the purchase order, the goods receipt, and the supplier invoice on quantity and price before releasing payment, ensuring a company pays only for what it ordered and actually received.
MRP (Material Requirements Planning)
MRP (Material Requirements Planning) is the ERP calculation that explodes demand through bills of materials, nets it against on-hand and on-order inventory, and offsets by lead time to produce timed purchase and work order suggestions.
Chart of Accounts
A chart of accounts is the organized list of accounts a business uses to classify every financial transaction, typically structured with segments for natural account plus dimensions such as site, department, product line, or project.
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