PURCHASE REQUISITION: TYPES, HOW IT IS MADE AND EXAMPLES - DUDAS - 2025

The purchase requisition form is the document generated by a user department or by warehouse personnel to notify the purchasing department of the items that need to be ordered, the quantity and the delivery time frame. Buying from a business begins with gathering requirements.

After they have been compiled, the purchasing department should be informed. The purchase requisition is the document that will contain the list of those requirements. To prevent fraud, department managers are generally not allowed to order directly from suppliers or to buy on behalf of the company.

Instead, it is a different department called the purchasing department that actually places orders with external vendors. The managers of the various departments use the purchase requisition forms to inform this department what materials need to be purchased.

Purchase requisitions and purchase orders are key documents in the process of acquiring the items that the company needs for its operation, standardizing the order process internally and externally.

Types

The key points about the purchase requisition are as follows:

- It is a request made to the purchasing department to acquire a certain list of materials.

- You need the approval of the purchasing organization.

- It is an internal document; that is, it remains within the organization.

You can create a purchase requisition for the following types of procurement:

Standard

To obtain supplies and materials from suppliers, both for production processes and office consumables and other assets.

Outsourcing

To supply raw material to a supplier, and thus obtain a finished product.

Consignment

Obtaining material that is kept in the company's facilities and the supplier is paid for that.

Transfer

To obtain materials from another department or area that is within the same organization.

External service

To obtain the services of a third-party provider, such as performing plant maintenance.

As elaborated?

The basic components that make up a purchase requisition are:

- Number of the requisition, which allows the identification of the document. It must be pre-printed.

- Requesting department.

- Date of the requisition and requested delivery date.

- Name of the person who prepares the requisition and the signature of the person who carries out the corresponding authorization.

- The requested items must be described in detail, to avoid inaccurate data. The amount must be exact; it is very important to place the required unit (kilos, liters, units, etc.).

- Signature of the purchasing department manager who approves or does not approve the purchase.

- If quotes have already been requested from suppliers, they must be attached to the requisition.

Purchase requisition process

The purchase requisition process is used by organizations to place and track orders for supplies. These can be anything from raw materials to office furniture and more.

When a department manager considers that materials are running low, they fill out the purchase requisition form, which includes the fields listed above.

A purchase requisition is the form that a company department sends to the purchasing department, listing the items that it wants to be ordered from an external vendor.

This process allows users to place an order, receive supervisor approval, and most importantly, allow third-party vendors to submit price quotes.

When the purchasing manager receives the purchase requisition in this process, he can review all the information submitted by the source user. The manager simply selects whether the requisition is approved or not.

If it is not approved, there is a box to put the reason for the decision and the requesting department will be informed about this decision. However, if the manager gives his approval, the next step will be to request a quote from the suppliers.

Importance

Start the purchase process

From time to time, the departments of a company will need materials; the purchase requisition initiates the purchase process. The purchasing department will act according to the strength of the document.

If there are any problems, the document will serve as evidence that a department ordered the supplies with a certain communication.

It is a control tool

Where there are no proper controls, staff can be involved in fraud, as they may request materials for personal use.

With a purchase requisition there are measures in place to ensure that no fraud is practiced. The request must go through several hands to ensure its accuracy and necessity.

Protect the business

With requisition orders in place, the chances of fraud are avoided. Company assets are also protected.

Centralization of the purchasing process

When an organization requires all requisitions to be carried out centrally through the purchasing department, it is easy to manage the entire process.

Buyers benefit too, as they can now bundle purchases and leverage the purchasing power of the organization to negotiate better terms.

Examples

Example 1

Request No.: 00455

Date: May 15, 2018

Applicant's name: Annaliese Corvo

Position: training supervisor

Department: Personnel training

Reason for request: The following articles are required to be used in the training course "Quality assurance", which will be given during the week of July 16-20, 2018.

- 01 case of flip chart markers.

- 12 pencils.

- 01 flip chart with 20 white sheets: 1 meter wide x 1.5 meters long.

- 12 normal size single line notebooks.

- 06 colored markers for whiteboard.

- 12 erasers to erase.

- 12 blue ink pens.

2 quotes received from stationery suppliers are attached.

Authorized by: Alberto Moreno

Position: Human Resources manager

Human Resources Management

Example 2

Confecciones Tely, SA's production department needs to order different materials and fill out the purchase requisition form. This form notifies the purchasing department that these supplies are needed.

The purchasing department can approve or deny the requisition received. If approved, a purchase order will be created.

The purchase order is sent to the vendor to purchase the products. The supplier produces and delivers the products with an invoice.

The receiving department receives the products and delivers the receipt report to the accounting department.

If all the documents are compliant, the accounting area issues the approval of the invoice to the cashier, indicating that the payment can be made to the supplier.

References

1. Business Dictionary (2018). Purchase requisition. Taken from: businessdictionary.com.
2. MyAccountingCourse (2018). What is a Purchase Requisition? Taken from: myaccountingcourse.com.
3. Forest Time. The Difference Between a Requisition & a Purchase Order. Small Business - Chron. smallbusiness.chron.com.
4. Dani Hao (2018). What is a Purchase Requisition and Why It Is Important for Your Business. Procurify. Taken from: blog.procurify.com.
5. Tutorials Point (2018). SAP MM - Purchase Requisition. Taken from: tutorialspoint.com.