What is Requisition?
A requisition is a formal request made by an employee or department within a company to procure goods or services. It serves as the first step in the procurement process, ensuring proper authorization and record-keeping before proceeding with a purchase.
Key Points About Requisition:
Purpose:
It initiates the purchasing process by requesting necessary items or services.
Helps maintain organized internal records and budget control.
Difference from Purchase Order:
A requisition is the request for approval to purchase, while a purchase order is the document used to finalize and execute the purchase.
A requisition always precedes a purchase order.
Importance in Organizations:
Facilitates clear communication between departments.
It helps large organizations manage accounting and finances more efficiently.
The Requisition Process:
Filling Out a Requisition Form:
The requesting employee or department completes a requisition form specifying the required goods or services.
Submission for Approval:
The form is submitted to the finance or procurement department for review and approval.
Authorization:
The requisition is either approved or returned for clarification or adjustments.
Transition to Purchase Order:
Once approved, the requisition is converted into a purchase order to proceed with the purchase.