Purchase Requisition

Purchase Requisition

What is a Purchase Requisition?

Definition

A purchase requisition is put up by a user to the purchasing department within the company. On the basis of this requisition, the purchasing department arranges to procure the required material from a supplier.

What does purchase requisition mean?

In most companies, individual departments are not allowed to raise purchase orders directly. Instead, they must put up a purchase requisition that provides details of their requirement to the purchasing department of the company.

The purchase requisition will mention the name of the person who is raising the requirement, the date on which it is being raised, and will provide details of the material that is needed. It could also specify the timeframe within which the request must be fulfilled.

Why can’t individual departments order what they need directly from suppliers? It’s important to remember that a purchasing department is a specialized unit of the company that has expertise in negotiating the best rates and in ensuring that the materials being procured are of the required quality.

Example of a purchase requisition

Stephen Lay works as a supervisor at Bosch Manufacturing Co. He is in charge of ten workers and the machinery that they operate. The equipment requires periodic maintenance for which lubricating oil and other consumables are used.

Every two months, Stephen puts up a purchase requisition to the purchasing department for the procurement of lubricating oil and consumables. On the basis of this request, the requisition is approved by the manager that Stephen reports to and is then forwarded to the purchasing department. The required materials are usually provided within ten days.

However, the latest purchase requisition was not approved. The purchasing department asked Stephen to explain why the requisition had been put up six weeks after the last one, instead of the usual two months. When Stephen explained that his department had been working extra shifts and hence had used the consumables faster, the requisition was approved.

Summary

A purchase requisition is a written document that is put up by a user within the company to the purchasing department. The information on the requisition is used to prepare the purchase order.