A purchase requisition is a formal request made to the Procurement team by a business department or cost center to purchase items or services that are necessary on a regular basis. Led by the requesting department, a purchase requisition includes information about the item required, delivery dates and more. Once approved by Procurement, the requisition is turned into an official Purchase Order (PO).
A Purchase Order is essentially a contract between a purchaser and supplier for goods or services, containing all relevant descriptions, pricing, payment terms and other material details. It’s an agreement for the sale and purchase of a specific quantity of goods at an agreed upon price and within a specified timeframe. A PO serves as a legal document to protect both parties should anything go wrong and marks an individual commitment from both parties in the sale and purchase process.