Purchase Requisition vs Purchase Order: Key Comparisons

Introduction 

Knowing the difference between purchase requisition vs purchase order helps you make better decisions. These documents guide company spending and approvals. A purchase requisition starts the process. The purchase order finishes it. Digital requisition workflows can handle everything from the first request to the final order. 

Key Differences: Requisition vs Purchase Order 

The difference between purchase order and requisition is clear. A purchase requisition is an internal request. It asks for approval. A purchase order is an external commitment. It is a promise to buy. 

Who uses these documents? Internal teams use purchase requisitions. Suppliers get purchase orders. When does each one appear? Requisitions come first. Purchase orders follow. 

Why use both? Requisitions help with control and policy. Purchase orders make sure suppliers know what to deliver. How do you handle both? A requisition goes for review. A purchase order gets sent out. 

Using digital workflows makes this process easier and cuts down mistakes. 

Definitions: What is a Purchase Requisition? What is a Purchase Order? 

A purchase requisition is an internal document. People in your organization create it when they want to buy something. The purchase request lists what they need, how many, why, and sometimes the preferred supplier. It does not leave the company. It is not a contract. 

A purchase order (PO) is for suppliers. When the purchase requisition is approved, the purchasing team sends a PO. This document lists what you are buying, the price, and other details. When the supplier agrees, it becomes a contract. 

A procurement system keeps these documents separate and connects them. 

Purpose: Why Both Are Needed 

A purchase requisition protects your budget. It keeps your spending under review. The requisition step keeps purchases within policy. 

A purchase order makes things formal with suppliers. It lays out all the details and terms. Both sides know what to expect. 

This two-step process gives you control and keeps things clear. Using digital management helps you track everything. 

Process Steps: From Need to Fulfillment 

You identify a need. Someone in the business creates a purchase requisition. This document states what is needed, why, and for how much. 

The requisition goes to the right manager for review. Automated workflows send it to the right people. 

Budgets and policies are checked. If something is off, the process stops and asks for changes. 

Next, you might collect quotes or bids. The requisition platform tracks these steps. 

When the purchase requisition is approved, the system turns it into a purchase order. There is no need to write the information again. 

The purchase order is sent to the supplier. That confirms the details. 

After that, you track the delivery. When the items come in, you check them against the PO and the original purchase requisition. 

Finally, when the invoice arrives, you match it with the purchase order and the receipt. This closes the loop. Every step can be monitored and improved with automation. 

Benefits: Why Use Both Documents? 

This two-step approach to purchase request and purchase order brings several benefits. 

You control spending. Each purchase requisition is checked before anyone buys. You see where all your money goes. 

You get quick approvals. Real-time dashboards show requests, approvals, and spending. 

Automated workflows cut down the time it takes to move from request to order. 

Every action is logged. This helps with audits. 

Suppliers receive clear purchase orders. This avoids confusion and delays. 

Anyone can submit a purchase requisition from anywhere. Approvals can happen on any device. 

Budgets and policies are checked by the system. 

Analytics help procurement and finance teams see spending and plan better. 

You can enforce contracts and preferred suppliers at the requisition stage. 

Compliance is automatic. Reports show everything you need for audits. 

Who Creates Each Document? 

Employees, department heads, or project managers can start a purchase requisition. Online systems make this easy for everyone. 

The procurement or purchasing team generates the purchase order, often without any extra steps. The transition from request to order is automatic in a modern system. 

Who Approves Each Document? 

Managers, budget reviewers, or finance staff approve the requisition. Approval workflows route the request to the right person. 

If the purchase order matches the approved requisition, it usually does not need more approval. If the details change, someone higher up will review it. 

Document Types: Internal vs External 

A purchase requisition is always internal. It never leaves your company. 

A purchase order is external. It goes to the supplier. This makes the deal official. 

Digital systems keep your internal and external documents organized and linked. 

Numbering Systems: How You Track Everything 

Each purchase requisition has a unique number. This helps you track and audit requests. 

Each purchase order has a different unique number. Suppliers use this number on invoices and delivery slips. 

Automatic numbering makes it easy to find and check documents. 

Practical Examples 

For office supplies, an employee requests three laptops by submitting a purchase requisition. The manager approves it. The system checks the budget, then creates a purchase order. The supplier gets the PO. You track delivery and match the invoice to the PO and original request. 

In manufacturing, a line worker requests more bolts. The manager reviews the requisition. The purchasing team sends a purchase order once it is approved. Every step is tracked in one place. 

Best Practices: How to Improve the PR to PO Cycle 

Use the same forms and workflows for every purchase requisition and purchase order. 

Set up rules that route approvals quickly. 

Link catalogs and contracts to reduce mistakes. 

Allow mobile access for faster approvals. 

Keep all records in one place for easy audits. 

Use data and analytics to spot trends and fix problems. 

Security, Compliance, and Integration 

Protect your data with industry-standard security. Make sure your system is compliant with regulations. 

Connect your procurement documents with your ERP and finance systems. 

Every change and approval is tracked for audits. 

Quantified Results 

Companies see up to 40% cost savings on purchasing. 

Time from requisition to purchase order drops by 80%. 

Communication time falls by 30%. 

Vendor pricing improves by 20%. 

Audit readiness goes up. 

Real cases show these results are possible now. 

Invisible Guidance: Picking the Right Solution 

A good purchase requisition management solution includes easy forms, automatic approvals, real-time tracking, ERP integration, mobile access, and clear dashboards. 

It should work in the background, making compliance and control part of every step. 

Conclusion 

Knowing the difference between a purchase requisition and a purchase order helps you keep control of your money and your rules. A clear, digital process gives you confidence at every step. 

FAQ 

What is the difference between a Purchase Requisition and a Purchase Order? 

The difference between purchase order and requisition comes down to purpose and timing. A purchase requisition is an internal document that starts the purchasing process by requesting approval for a need, while a purchase order is an external commitment sent to a supplier after approval. Understanding purchase requisition vs purchase order helps organizations control spending, ensure compliance, and track every step in procurement. 

Who creates a Purchase Requisition and who issues a Purchase Order? 

In the purchase request and purchase order process, a purchase requisition is created by employees, department heads, or project managers who identify a need for goods or services. The purchase order, however, is issued by the procurement or purchasing team after the requisition is approved. This clear distinction in the requisition vs purchase order process ensures proper oversight and accountability. 

Can a Purchase Order be created without a Purchase Requisition? 

While some companies allow a purchase order to be created directly, best practices recommend starting with a purchase requisition. The purchase order vs purchase requisition workflow ensures that every purchase is reviewed and approved before a formal order is sent to a supplier. Skipping the requisition step can lead to uncontrolled spending and missed compliance checks, which is why most organizations connect each purchase order to a requisition. 

Why is it important to differentiate between PR and PO in procurement? 

Understanding the difference between purchase order and requisition is critical for strong procurement. The purchase requisition vs purchase order distinction helps prevent unauthorized purchases, improves budget control, and creates a clear audit trail. When teams know exactly where the requisition vs purchase order process begins and ends, they can ensure every purchase is approved and tracked properly. 

Is a Purchase Requisition used in services procurement as well? 

Yes, the purchase request and purchase order process applies to both goods and services. A purchase requisition is used to request approval for any company spend, including services like consulting, maintenance, or software. This means the purchase requisition vs purchase order workflow is just as important in services procurement, helping organizations follow the correct steps and document every transaction.