The Purchase Requisition Form in the procurement process plays an important role. It is a means whereby an employee of a company can request materials or equipment. Once the employee of the company has completed the Purchase Requisition and it has been authorised, they can then take it to the purchasing department for a Purchase Order to be created.
For Internal Use Only
The Purchase Requisition Order is only for internal use within an organisation. It is in effect a method of ensuring that supplies and spending are carefully controlled. The purchase requisition is a formal way of issuing notice that material is required. Usually someone has to authorise a requisition so there is a clear indication of who wanted the item and who said that it could be purchased. This is important in terms of being an audit trail. If for example goods were repeatedly being ordered that were not actually needed, then the Purchase Requisition Orders could be checked to ascertain who had actually said that it was ok to make the purchase. This safeguards the company from any rogue orders and is a good way of ensuring that only necessary items are ordered.
Electronic Requisition Forms
Some organizations utilize technology to manage requisitions and the requisition form is electronic and is simply a way of improving efficiency, with the form being completed online and then sent off to the relevant person in the purchasing department.
Clear Directions To Purchasing Department
Although the use of Purchase Requisitions may seem slightly bureaucratic, they are very useful, not just in terms of the audit trail, with accountability for orders being shown, but they also provide the purchasing department with very clear instructions about what is required, what the budget is, when it should be delivered together with possible sources of supply.
Often the Requisition will contain details of any cost codes that are required for budgeting purposes; so if an item is to be charged to a particular area of the budget then the purchasing department will be told which cost code to charge the items to, so it helps keep budgets up to date. Since this information will not be contained on the Purchase Order, it is a way of ensuring that the books are balanced and there are no over spends.
The Requisition should also contain details of the time scale for delivery, so if something is urgent, then this should be noted on the Requisition- it should not be assumed that the purchasing department will know that something is urgent, it is up to the person who is completing the form to make arrangements for the order to be treated as such.
Vital To Purchase Orders
Many organizations will not create a Purchase Order until they have actually had a Requisition Order; this is standard practice and ensures that everyone understands the processes involved. So the Purchase Requisition Order may be a humble, internal document, but in its own way it is actually quite important.
Comments
4 Responses to “The Role Of A Purchase Requisition In The Procurement Process”
Good
Just stated studying cips, nice article.
Well done. I think the article explains very key issues. I am working towards becoming a procurement specialist so it was very helpful.
How do I find more??
this is really helpful. as a procurement officer what should be my next move after receiving the requisition form