Purchase Requisition

Purchase requisitions serve as a critical internal control in the procurement process. Without them, anyone could commit the company to spending, leading to budget overruns, duplicate purchases, and unauthorized commitments. The requisition process ensures that every purchase has proper authorization before any commitment is made to a vendor. The typical workflow starts when an employee identifies a need. They create a requisition in the ERP specifying the items or services required, the quantity, preferred vendor (if known), estimated cost, account or cost center to charge, and the date the goods or services are needed. The system then routes the requisition through an approval chain based on configurable rules. Common routing logic includes amount-based thresholds (under $1,000 requires manager approval, over $10,000 requires director approval), department-based routing, budget availability checks, and category-specific approvers. Each approver can approve, reject, or send back for revision with comments. Once fully approved, the requisition can be converted into a purchase order. This conversion can be one-to-one (one requisition becomes one PO) or many-to-one (multiple requisitions for the same vendor are consolidated into a single PO to improve pricing leverage and reduce transaction costs). The purchasing team reviews the approved requisition, selects or confirms the vendor, negotiates final pricing, and generates the purchase order. Requisition data feeds important analytics. By analyzing requisition patterns, procurement teams can identify opportunities for contract negotiation, spot maverick spending (purchases made outside preferred vendor agreements), and forecast upcoming demand for commonly requisitioned items. Budget owners can see committed spend (approved requisitions not yet converted to POs) alongside actual spend, giving a more complete picture of their remaining budget.