The Importance Of Purchase Requisitions In Procurement
Table of contents
1. What are purchase requisitions?
2. Why are purchase requisitions important?
3. The benefits of using purchase requisitions
4. The Purchase Requisition format
5. Purchase Requisitions are not Purchase Orders
6. Prokuria, your purchase requisition software
Department managers are usually not permitted to place orders with suppliers directly to avoid fraud. When supplies run out, department heads pass a purchase request on to purchasing managers so they know what materials are required.
What are Purchase Requisitions? Why is it necessary for them? And how do they differ from Purchase Orders? Continue reading to learn more about them.
What are purchase requisitions?
A purchase requisition is an internal document used by workers to notify department supervisors about the resources they require. This document is then utilized by department managers to inform purchasing personnel that purchasing may begin.
The finance department also uses the purchase requisition to keep track of reporting procedures with accounting.
Why are purchase requisitions important?
The purchase requisition procedure is critical to the purchasing process of a company. It protects against fraud and ensures that organizations get value for their money. This is made possible by the fact that a formal request must pass through several approvals before being accepted, as well as the requirement.
Purchasing managers have the authority to accept, alter, or even reject a request. If they reject it, however, they must provide a reason (need, available money, etc.).
Approving the requisition gives purchasers the right to create a purchase order. This is a formal notification to suppliers announcing the intent to make a purchase.
It is simple to track goods if you use purchase requisitions as evidence. It becomes easier to manage the whole procurement process when businesses demand that all requests be submitted centrally through the purchasing department.
Centralized procurement streamlines the whole buying journey and reduces delays, which has a significant impact on productivity.
The benefits of using purchase requisitions
Aside from the fact that it helps to prevent fraud, issuing purchase requirements has several benefits. Here are a few examples:
- You can prevent duplicate orders
If only one person is in charge of purchasing items, it’s simple to keep track of them. For larger organizations, it is a bit complex because purchase requisitions can keep track of what’s needed, by whom, and when.
2. They’re beneficial for financial audits
Because managers approved the company’s purchases, some financial audits need evidence of this. For these examinations, purchase requisitions (as well as purchase orders) may be used as proof.
3. They assist you in keeping track of orders
This is something that should go without saying, but having a well-organized purchase system makes it much simpler to keep track of what items are arriving at any one moment. Inventory management is considerably easier as a result of this.
4. They prevent misunderstanding
Purchase orders clearly communicate the specifics of a purchase. Organizations may avoid potential conflict or confusion by having every detail clear and written down.
5. They’re legal paperwork
Even though purchase requisitions are internal papers, they may be used as legal documentation if any issues arise regarding what was ordered or the agreed-upon price.
Do you still have doubts? Check out this blog article where we addressed the most frequent objections to purchase requisitions.
The Purchase Requisition format
The purchase requisition form is customized for each company and the goods ordered, however, it should include these essential components:
- the requestor’s name and address
- the date of the request
- the items, activities, or services requested for delivery on a specific date
- the delivery location
- the department in charge of deliveries
- the requestor’s signature.
For more information on how to put in place a purchase requisition workflow, see our dedicated article.
Purchase Requisitions are not Purchase Orders
Here are the differences between the two of them:
Prokuria, your purchase requisition software
To make the procedure easier, some organizations use technology to manage orders. We’re also pleased to inform you that Prokuria now includes a purchase requisition feature, which allows your workers to be more productive. The form is completed online and then emailed to the person in charge. There will be no more paper; instead, there will be improved visibility!
For smaller organizations, dealing with such a time-consuming and formal purchasing procedure may appear to be a waste of time and resources. Larger companies, on the other hand, benefit from this procedure, even if it is time-consuming and slow. And who doesn’t want to save money while getting more?
Are you interested in automating your purchasing procedure with Prokuria? Try it free now.
