All You Need to Know About Requisition Number

September 13, 2022
Alok Suman
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Digital transformation and technological progression, in the past few years, considerably improved the rate of enterprise transformations, allowing them to become more efficient and adaptable.

Given the global outreach of every modern business, procurement and purchase managers might feel overwhelmed with multiple employees' demands to buy things. 

When speaking of purchasing in the organization's name, managers must handle the job with higher accountability and carefully assess the requirement for spending.

This is where the concept of purchase requisition comes into the picture and helps managers begin the procurement process on the right note by facilitating effective communication.

Keep reading to learn more about purchase requisition and how it can help procurement managers in every organization. 

What is Purchase Requisition?

Purchase requisition (PR) refers to an internal business document that the employees in a workplace issue to request purchasing goods or demanding services from a vendor on behalf of the organization.

A purchase requisition in a workplace also leaves an impactful audit trail to assess budget compliance, purchasing process, and administrative determinations. 

However, note that while a purchase requisition is not a legally binding document, it always guarantees an in-house approval strategy and interaction.

When speaking of purchase requisition, numerous measures exist, from identifying the purchase requirement to procuring the services and goods. 

It might not be wrong to say that a purchase requisition initiates the procurement process. In addition, the purchase requisition procedure plays a fundamental part in the procurement process in an organization and ensures fraud prevention.

This is possible because the purchase requests undergo several approvals to guarantee their accuracy and requirement. In addition, purchase requisitions are an essential aspect of a thoroughly audited and responsible Procure-to-Pay cycle.

For instance, when a company receives any invoice from a vendor, the finance division can readily match the invoice against the purchase requisition number assigned to that invoice.

This way, they can verify the purchase cost to ensure it matches the invoice value. In case the purchase requisition does not match the expected cost or quantities obtained, then the accounts payable department can send the invoice back to the supplier. 

Modern companies generally manage monitoring and creating purchase requisitions in numerous methods. Yet, the most impactful is having an automated procurement system that combines effortlessly with other financial systems and controls the acquisition order cycle. 

Companies employ advanced electronic systems rather than depending on spreadsheets or email to make, transfer and track these records. This way, they can considerably lower expenses, have better dominance over the business, and facilitate a more streamlined process.

Moreover, purchase requisitions are crucial to spending administration regardless of the methodology used. They assist in regulating expenses and inventory and aid companies in avoiding duplicate or lost orders, explaining essential elements, watching purchasers and vendors, and guarding against financial audits.

What is the Purchase Requisition Number?

A purchase requisition number refers to a unique system-generated digit that helps procurement managers track the requested goods and services with a full audit trail.

In simpler terms, a purchase requisition number is a document that initiates a demand for a specific action and registers that activity for business reporting pursuits. 

If an organization's workers demand additional goods or services, they would unquestionably use a purchase requisition number. If a company's employees require additional supplies, they will use a buy requisition.

While earlier companies used paper-based purchase requisition numbers, many companies now automatically generate a purchase requisition that facilitates quick process tracking and accounting.  

What is a Purchase Requisition Form?

A purchase requisition form is a formal record utilized by workers in an organization to purchase goods or services for their business. Note that this purchase requisition form might be for enterprise functions (like procuring office supplies), manufacturing, or buying inventory. 

Upon generation, the employees submit the requisition form to the purchasing department, which is generally the primary step in making an impactful audit trail for purchasing.

Once the appropriate division ratifies the purchase requisition form, a purchase order (PO) for the requested services or goods is issued to the supplier.

Purchase requisition forms usually comprise the following details:

  • Name and division of the requestor
  • The goods or services requested
  • The date of request
  • The legal name of the vendor
  • Item description, price, and quantity
  • Purchase purpose

The Bottom Line 

To sum up, purchasing requisition is a document administered by employees in an organization when they wish to purchase anything on behalf of the company.

When issuing a purchase requisition, employees must always describe the intended purchase and deliver all required details. 

While using purchase requisitions might not be required in every organization, it is advisable to specify transparent procedures for ordering purchases – especially for developing companies.

By issuing specific purchase requisitions, companies can readily enhance internal interaction, save funds and time and avoid fraud and maverick spending. 

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