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In general, a purchase requisition order is a form that requests an item to be purchased. These orders are often used by larger companies and organizations to manage purchases and costs. A central processing department, often called a purchasing department, usually evaluates the orders and determines where to source them from. Once this is determined, the purchase requisition order is generally be converted into a purchase order to procure the items requested from a vendor.
Purchase requisition orders often come as paper forms or online documents. In either case, the forms require the same types of information, such as the requestor’s name and department, any applicable account numbers, part numbers and descriptions of the items requested, and any suggested vendors to source the products from. If online, the forms may be submitted electronically via special requisition software, or they may need to be printed out and forwarded like traditional paper forms.
Typically, the purchasing process begins at the individual or departmental level. For example, if an employee needs a new laptop computer, he or she may be required to submit a purchase requisition order for it. In cases of individual orders such as this, the form must often first be approved by a manager or department head before being sent on to a centralized purchasing department for further evaluation.
When a purchase requisition order arrives at a purchasing department, it is often evaluated to see if the item is truly needed and if there is money allotted for it. If these conditions are met, the purchasing department will then generally determine where to source the item from, using a list of trusted vendors. In the case of expensive purchases, they may seek bids from several vendors to find the most competitive terms. Preference may be given to any vendor cited on requisition form, though some purchasing departments have the authority to make the final sourcing decision based on what is best for the organization. Once the final details are approved, a purchase order is generally issued to complete the transaction with the chosen vendor.
On its own, a purchase requisition order often has no official buying power. It is usually the final purchase order that constitutes a contract between the company and the vendor. Some organizations may, however, use purchase requisition orders interchangeably with purchase orders. In these cases, the purchase requisition order may be used directly with the vendor as a contract to buy a particular item, with no secondary purchase order required.
It's quite a long process to get needed items ordered, whether it's a big or small order. Since the process takes a while, individuals and departments need to plan ahead what they will be needing.
Getting the purchase requisition approved on various levels may take a while too, because those kind of things tend to sit on manager's desks for a time.
In the past, a lot of companies used to keep some petty cash handy for small purchases that didn't need a formal requisition. I wonder if companies have a petty cash fund anymore.
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