What is a Purchase Requisition? Definition
A purchase requisition (PR) is a formal document that is created by a department within an organization when it intends to buy goods or services. The PR is then approved by a manager and sent to the purchasing department, which will find vendors and request quotes. A PR usually contains information such as a description of the item to be purchased, the quantity needed, the date needed, the expected cost, and the name of the person who requested the purchase. It is important to have a clear and concise PR in order to avoid any confusion or delays in the purchasing process. In this blog post, we will explore what a purchase requisition is, its purpose, and how it is used within an organization. We will also provide some tips on creating an effective PR.
What is a purchase requisition?
A purchase requisition is a formal document that is created by a department within a company to request the purchase of goods or services. The requisition must be approved by the necessary individuals within the company prior to the purchase being made.
The different types of purchase requisitions
A purchase requisition (PR) is a formal document that is created by a company’s employees when they need to request goods or services. The PR is then submitted to the procurement department, which will review the request and determine if it is approved.
There are three different types of purchase requisitions: Standard, Blanket, and Contract.
Standard Purchase Requisitions are used for one-time purchases of goods or services that are not expected to be used on a regular basis.
Contract Purchase Requisitions are used when a company wants to enter into a contract with a supplier for the purchase of goods or services. This type of PR is typically used for large orders or for purchases that will be made on a regular basis.
How to create a purchase requisition
When creating a purchase requisition, there are a few key things to keep in mind. First, you will need to identify the need for the purchase. This can be done by evaluating current inventory levels, considering future needs, and determining if the item is something that is regularly used or consumed in your business. Once you have determined that there is a need for the purchase, you will then need to create a requisition form. This form should include basic information about the item or service being requested, as well as the quantity needed and delivery date. Once the requisition form is complete, it will then need to be approved by the appropriate manager or decision maker within your company.
Advantages and disadvantages of using purchase requisitions
There are both advantages and disadvantages to using purchase requisitions. On the plus side, purchase requisitions help to ensure that all necessary approvals are in place before a purchase is made. This can help to avoid overspending and prevent unauthorized purchases. Additionally, purchase requisitions can help streamline the procurement process by creating a paper trail that can be followed if there are any questions or issues with the purchase.
On the downside, purchase requisitions can add an extra layer of bureaucracy to the procurement process. They can also slow down decision-making if there are delays in getting approvals from the necessary parties. Additionally, if purchase requisitions are not properly managed, they can create a significant amount of paperwork that can be difficult to keep track of.
When to use a purchase requisition
There are a few different circumstances where it may be appropriate to use a purchase requisition:
If the item(s) being requested are not available through the company’s preferred vendor, a PR may be necessary in order to obtain quotes from other vendors.
If the item(s) being requested are not stocked items, a PR may be necessary in order to place a special order with the vendor.
If the total cost of the item(s) being requested exceeds the company’s purchasing threshold, a PR may be necessary in order to get approval from senior management before proceeding with the purchase.
A purchase requisition is a formal request to purchase goods or services. The request is typically made by an employee of a company who needs the goods or services for their job. Purchase requisitions are usually approved by a supervisor or manager before the purchase is made.