Bellwether EPMX Purchasing Software: Requisition Software Module — Bellwether
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Everything You Need to Know About Purchase Requisition

The manual purchase requisition process has been a nightmare for many organizations now and it is time we switch to a digital process. Businesses need to reinvent their manual purchase requisition process as this has a direct impact on a company’s bottom line. 

The manual process takes the company downhill and sets the company up for a disaster. Complete dependency on paper forms, emails, and excel sheets can dramatically decrease your chances for survival. 

When the purchase requisition process is automated, it will not only free up more time for productivity in an organization but also help in resource management. Having a digital purchase requisition software is a necessity for companies to succeed. 

Streamlining the purchase requisition workflow process will help in eliminating maverick spending and dark purchasing. But what exactly is a purchase requisition? Let’s take a look at understanding this subject better. 

What is a Purchase Requisition?

Simply put, a purchase requisition is a document put together by an employee within your organization. This document is used to request a purchase of goods or services. The employees request this purchase on behalf of their organization. 

The purchase requisition is an official document used to inform department managers or purchasing officers/managers about a decision to make a purchase. This is when the purchasing department is prompted to start the purchasing process. This document is also used by the finance team to coordinate with the accounting department about the reporting procedures. 

When a requisition is created, anyone in charge of purchases at your organization is notified that an order request has been made. A purchase requisition highlights the details required before completing the purchase, should it be approved, such as – 

    • Product description and quantity

    • Name of the vendor

    • Price

    • Name and department of the purchaser 

This document is not a legally binding document as such. Requisitions are used by employees as internal documents only to obtain permissions. Not all organizations require a requisition to be created. Some organizations require a request to be created only if the purchases go over a set dollar amount. 

The accounting department can also use this document to plan for future spending as it is better to avoid costly mistakes if a budget is checked before approvals. 

Steps involved in a Purchase Requisition Process

The purchase requisition process flow is more or less the same across organizations i.e. it is the same sequence of predictable tasks across organizations. A general process flow involves the following steps: 

Purchase Requisition Steps

    1. Creating a purchase requisition by filling out a requisition form. 

    1. Getting the requisition approved internally from the team’s supervisor and head of department, then routing it to the purchasing department. 

    1. Review and approval of the requisition by the purchasing department. In case it is rejected for any reason, it is sent back to the requesting team for changes with the reason for rejection mentioned in it. 

    1. Once the requisition is approved, a purchase order (PO) is created which contains the quantities, price, etc. 

    1. This PO is then sent to the supplier for acceptance. Once it is accepted, it becomes a legally binding contract. 

Difference between Purchase Requisitions and Purchase Orders (PO)

One of the most important aspects of running a business is procurement – the process of acquiring goods and services. Within procurement, there are a number of different documents that are used to purchase items, including purchase requisitions and purchase orders. 

An efficient procurement process considers both purchase requisition and purchase order key documents in a business. Your team can plan purchases adequately, plan budgets, and also provide proof of finances in case of a financial audit. 

However, not many people are familiar with the difference between the two documents and their specific roles within the purchasing process. 

We understood what a purchase requisition is. Now, before we get into the difference between the two, let’s first understand what is a purchase order (PO). 

After a purchase requisition is approved, the purchasing department will generate a purchase order that will be sent out to the vendor. The PO is a legally binding document outlining exactly what the organization intends to purchase. 

A purchase requisition was an internal document created by the employees of the company internally. But, a PO is an external document that the purchasing department sends out to the vendor as a set of instructions for order fulfillment and payment processing. However, POs are not a prompt for payment. 

Once a PO is approved by both the parties i.e. the buyer and the vendor, it becomes a legally binding document. In simple terms, POs contain all the information a vendor needs to fulfill the order and everything your company needs to document the purchase. Following are a few fields that you will find in a PO:

    • Name of your company

    • Name of the employee who created the order

    • The date on which PO was created

    • Quantity and item price

    • Terms of payment

    • Signature of involved parties

Now that we have understood what a purchase requisition is and what a purchase order is, let’s take a look at the difference between the two. 

Purchase Requisition vs. Purchase Order

    1. A purchase requisition (PR) can be created by any employee of a company while a purchase order (PO) is created by the purchasing department or the head of a department. 

    1. A PR is essentially a request for a purchase when there is a shortage of goods or services while a PO is confirmation of an order. An order is created after the PR is approved. 

    1. A PR is sent when an employee sees demand for goods or services and a PO is sent when an order needs to be placed for goods or services. 

    1. A PR is received by the purchasing department or the head of the department and a PO is received by the vendor. 

    1. A purchase requisition is not a legally binding contract while a PO is a legally binding contract between the buyer and the vendor. 

In summary, purchase requisitions are generated internally when there is a need for an item, while purchase orders are issued by the purchasing department when an agreement has been reached with a supplier. Purchase orders are binding contracts that commit the company to make payment, while requisitions are simply requests for items. 

Why do businesses need purchase requisitions?

The answer to this question is quite simple. The reason why businesses need requisitions is that this document lays down all the details of an order that your organization needs to make. 

A good purchase requisition software can help the company’s bottom line profits grow in leaps and bounds. By implementing such software, organizations can help their employees plan their purchases better and optimize organizational spend. 

A purchase requisition has the ability to eliminate indirect spend while reducing the time and effort spent by employees. These employees are typically chasing paperwork and emails to maintain purchasing records and this comes to an end with the introduction of an efficient purchase requisition software. 

Here are a few primary reasons why businesses need purchase requisitions:

    • Purchase requisitions initiate the purchasing process. They also help establish a clear procurement process

    • A seamless procurement process stays transparent because of requisitions

    • You can track every purchase order

    • Requisitions eliminate the risk of fraud and maverick spending as everything is documented and transparent

    • They help in assessing the legitimacy of the need

    • Requisitions serve as important evidence of communication

    • Finally, they help establish an audit trail for a seamless audit experience

A formal purchase request ensures that there are measures in place to detect frauds and reduce the risk of maverick spending. To ensure the accuracy of a purchase requisition, the request must go through a number of hands which ensures proper scrutiny before approving the request. 

Because of the above reasons, a company’s procurement process is transparent and has a secure audit trail which helps the accounting team to keep a track of every spend that is happening in the organization. The requisition document can always be counterchecked to ascertain certain facts and help establish a strong audit trail.

How to create a purchase requisition?

In any digital procurement software, once you log in, you can create a brand new requisition by clicking on the requisitions tab. Similarly, with Bellwether’s procurement software, you can create a requisition simply with a few clicks. Creating a purchase requisition should be simple and hassle-free. 

    1. When creating a requisition, it is important that an employee enters or selects the department that they are from. Next, you will need to enter a requisition number for your new request. Once you select the two, you can add a new requisition. 

    1. In this new requisition, you can add a Job Code, select a Project, G/L Account, Delivery Date, Requisitioner and finally, the Requisition Date i.e. the date on which this requisition was created. You can also add a suggested vendor to this request. Some of the mentioned fields could be mandatory. 

    1. Once these details are filled out, you can start building out your requisition by adding required line items. There are few ways of adding line items. The first one is by manually entering the item and its price, quantity, etc i.e. an ad hoc item. You can also add this item to a catalog if needed. 

The other way is to search your item catalog. You can search by Vendor, Keyword, Catalog Code, Description, etc. Once you have found your item, you can select it and it gets added to the line items. 

    1. Every line item can have a separate Item Code, G/L Account, Project, etc. You can simply click on the line item to fill out these details if you wish. 

    1. Once you have selected the line items, you can move on to add in the instructions or notes for the requisition. You can also add any attachments like an image, spreadsheet or even the terms and conditions document. 

    1. Similarly, you can also use the punchout method to create a requisition by choosing the Suggested Vendor dropdown and choosing Amazon, for example. The software will redirect you to the Amazon website and you can select an item directly from there and add it to the line items. 

    1. Finally, you can review the requisition before submission, to make sure the details are correct. Once everything is done, you can save the requisition and send it for approval. 

This is how simple it is to create a purchase requisition in Bellwether’s digital procurement software. This process starts the Purchase to Pay (P2P) process and makes it seamless and transparent. 

Purchase Requisition Form Example

A purchase requisition form is an internal document used by departments to make a purchase. The main aim of this form is to allow the teams to give crucial information to the purchasing department. The purchasing department can then place precise orders on behalf of the rest of the company. 

For example, if the marketing department of a company wants to purchase a SEO tool to improve their skillset, they will need to use a purchase requisition form. After they have filled this form, the person who looks after the requisitions in the marketing team will make a formal request for the software. 

These forms are formal requests made by the teams to the organization which reduce fraud in the company. Internal documents like these help validate the purchases. 

Once this requisition form is received by the purchase department, they are required to either approve, alter or even reject it. If the request is rejected, the purchase department must provide a valid reasoning why the request was denied.

If the request is approved, the procurement teams acquire the authority to convert this requisition to a purchase order. Once this is done, an actual purchase can happen. 

The purchase requisition form contains the following fields:

Bellwether Purchase Requisition Form

    1. Name of the Department which states the department which is putting forward a request. 

    1. The Requisition Number i.e. Req Number – which gives a unique number to the requisition by which it can be identified. 

    1. The Requisition Date mentioning the date on which the request was created. 

    1. The name of the Requisitioner who raised this request. 

    1. The Date of Delivery mentioning the date on which you want the items to be delivered. 

    1. It also has fields for Line Items – where you can either add items on an ad hoc basis or select items from catalog or from punchout catalog i.e. from a Suggested Vendor.  

    1. It also contains fields for Request Instructions and Attachments, if any. 

Key Benefits of Bellwether Requisition Module:

    • Individual users or departments can requisition items directly from on-line catalogs or in free-form mode.

    • Requisitions can be imported directly from Bellwether Purchasing Software Order System Inventory Module for items at or below their reorder points.

    • Purchase requisitions can be printed or transmitted in a paperless environment.

    • For users of Bellwether Purchasing Software Inventory module, requisitions for stock items are automatically routed to your warehouse.
        • Stock availability and subsequent stock commitment is performed in real-time.

        • If warehoused items are unavailable when requisitioned, the outstanding portion will be automatically filled when re-supply occurs.

        • Disbursement reports identify which items to pull from stock, their stocking locations and delivery information.

    • A multi-level, on-line approval process prevents items from being ordered without necessary approvals.
        • Requisitions are automatically routed by e-mail to the next approver listed in your business rules.

        • If denied, requisitions can be returned to the original requisitioner with a reason for the rejection.

    • With Bellwether Purchasing Software Order System, you can review requisitions online and convert them into Purchase Orders or Requests for Quotations without re-keying any data.

    • Multiple requisitions for similar materials or services can be combined in one order, or a single requisition can be split up into multiple purchase orders for a number of vendors.

    • On-line status inquiry and printed status reports make it easy to track the progress of requisitioned items, including expected delivery dates, back-order conditions and assigned buyers.

    • Bellwether Purchasing Software Requisition shows which requisitions are on hold awaiting approval; approved but not ordered; and ordered but not received.

    • Additionally, Bellwether Purchasing Software will display date received and quantity.

The web-based Requisition software module makes a powerful front-end as your current Purchase Order Solution, or you can couple it with other Bellwether Purchasing Software modules as part of a fully-integrated e-Procurement system.

Bellwether Purchasing Software Requisition module (requisition software) completely automates the on-line requisitions entry (electronic requisitions) and approval process. Most importantly, it’s designed to be user-friendly and incredibly easy to use.

Related Links:Purchase order software for small business | Purchasing requisition software | Web based purchase order system | Procurement software solutions

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