Purchase orders and purchase requisitions are key documents in an efficient procurement process. They both allow a purchasing department to adequately plan purchases and budgets as well as provide proof of spending in case of financial audits.
What Is a Purchase Requisition?
A purchase requisition is a document or form that an employee within your company fills out and submits to an approver to purchase goods or services. When a purchase requisition is complete, this starts the purchasing process. However, it doesn’t guarantee the purchase will go through.
A purchase requisition includes the following information:
- The date requisition is created
- The purchase requisition number
- The name of the employee making requisition
- The description of items needed
- The number of items in the price
- Suggested vendor information
What Is a Purchase Order?
A purchase order is a document that outlines the details of an actual purchase. After the purchase acquisition has been approved, the purchasing department creates a purchase order. Purchase orders tend to contain more information than purchase requisition numbers because they’re actionable documents. This includes:
- The purchase order number
- The name of the employee or department making the request
- The description of the product and the quantity required
- The name of the vendor
- The purchase price
- Payment terms
- The shipping address
The Key Difference Between Purchase Orders and Purchase Requisitions
The main difference between purchase orders and purchase requisitions is that a purchase requisition involves getting internal permission to buy goods or services.
On the other hand, a purchase order is used to actually purchase the goods or services. So, in a nutshell, purchase orders are about permission, while purchase orders are about purchasing.
The Importance of Purchase Orders and Purchase Requisitions
Purchase orders and purchase requisitions can give you more control over employee spending. As a result, your employees will have a greater chance of receiving discounts on goods or services because there’s greater visibility into purchasing.