Key Takeaways
- Internal request to start procurement process.
- Details requester, items, cost, and justification.
- Requires approval before purchase order creation.
- Ensures budget control and audit trail.
What is Requisition?
A requisition is a formal internal request used within organizations to initiate the procurement of goods, services, or resources necessary for operations. It serves as the first step in controlling spending before external purchase orders are issued.
This document ensures transparency and accountability by detailing the required items and justifications before any financial commitment is made.
Key Characteristics
Requisitions have distinct features that make them essential in procurement processes:
- Requester Details: Identifies the employee or department submitting the request to maintain accountability.
- Item Description: Specifies quantity, preferred vendors, delivery requirements, and estimated costs for clarity.
- Business Justification: Provides reasons for the purchase, such as operational needs or project support.
- Budget Alignment: Ensures the request aligns with available funds and financial policies.
- Internal Document: Unlike purchase orders, requisitions remain within the organization until approved.
How It Works
The requisition process begins when you identify a need, such as office supplies or equipment, and submit a detailed request through manual forms or automated systems. This document then routes through required approvers who verify budget compliance and necessity.
Upon approval, procurement converts the requisition into a purchase order to be sent to suppliers. This workflow integrates with modern tools, sometimes using data warehousing to automate routing and budget checks, optimizing efficiency and audit trails.
Examples and Use Cases
Requisitions apply broadly across industries to streamline purchasing and maintain financial control:
- Airlines: Companies like Delta use requisitions to request maintenance equipment or in-flight supplies before procurement approval.
- Consulting Services: Human resources departments requisition external training services, specifying scope and budget prior to vendor engagement.
- Office Supplies: Marketing teams submit requisitions for campaign materials, ensuring funding aligns with departmental budgets.
Important Considerations
Effective requisition management helps prevent unauthorized spending and supports compliance with organizational policies. Ensure your requisition includes accurate budget codes and justifications to avoid delays during approval.
Integrating requisition workflows with procurement software and reviewing options like the best business credit cards can further streamline cash flow management and expense tracking.
Final Words
A requisition is a crucial step to ensure budget control and transparency before procurement. Streamline your process by clearly defining needs and securing timely approvals to avoid delays or overspending.
Frequently Asked Questions
A requisition is a formal internal document used within an organization to request the procurement of goods, services, or resources needed for operations. It initiates the purchasing process before any external purchase orders are created.
A requisition form usually contains requester and department details, a description of the items or services needed, quantities, estimated costs, preferred vendors, delivery information, business justification, and budget alignment to ensure fiscal compliance.
The process starts when an employee identifies a need and submits a requisition form. The request is then reviewed and approved by relevant authorities before being converted into a purchase order that is sent to a supplier to fulfill the order.
A requisition is an internal document requesting approval to purchase, while a purchase order is an external document sent to vendors authorizing the purchase. The requisition must be approved before a purchase order is issued.
Requisitions help control spending, prevent unauthorized purchases, ensure budget compliance, and create a documented trail for tracking and auditing expenditures within an organization.
Yes, many organizations use automated systems that streamline the requisition process by routing requests, sending notifications, checking budgets, and speeding up approvals for greater efficiency.
Common examples include requesting office supplies like paper, purchasing equipment such as generators, or contracting services like consulting for training programs, each requiring proper justification and approval.
