What does 'requisition' mean? In procurement, a requisition is made when employees or departments from within a company require additional goods or services in order to maintain their business operations. These internal company requirements are communicated by submitting a purchase requisition form - typically to a purchasing department or project manager. For example, if Jane is a construction worker who notices that a building site is running low on steel beams...
Jane adds steel beams to a purchase requisition form.
Jane submits her requisition form to her project manager, Jill.
Jill approves the requisition before placing steel beams on a purchase order form (often abbreviated as 'PO').
Jill follows through with the purchase order process by sending the PO to a vendor to procure the steel beams.
The steel beams arrive at the building site or at a warehouse, and a goods receiving procedure is followed to confirm and document the delivery.
*Sometimes, additional steps and/or protocols are included in this purchase requisition process. You may also be interested in reading about the use of purchase orders vs requisitions.
An internal company document used by employees to communicate that goods or services are required, with details including time-frames, quantities, and order specifications.
Purchase requisition forms are usually assigned a requisition number when they're created, but what is a requisition number? A requisition number is a numbering system included on requisition forms to help accounting personnel verify the details surrounding purchased items in a company, and to let employees track the status of their requisitioned items. A requisition number is also useful for tracking the source of multiple requisitions that are placed upon a single purchase order form. When carrying out a goods receiving procedure that includes different branches or departments, received orders can be distributed by referencing the requisition numbers that are associated with them. Why are requisitions used? Rather than having employees order goods and services themselves, purchasing is channeled through qualified individuals by using the purchase requisition process. This allows procurement experts to approve, source, and negotiate with one or more vendors to facilitate efficient cost control and material management within a company. Did you know...
In modern procurement departments, e-procurement systems are typically used instead of traditional purchase requisition forms. This eliminates the clutter and confusion caused by physical paper trails, and automates documentation of the entire procure-to-pay (often abbreviated as 'P2P') process. The next time a colleague or friend asks "what does requisition mean?" - fill them in with more than just the dictionary definition!
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