Oct
8
A Purchase Requisition Form, which may also be referred to as a Purchase Request, is a document that is used within an organisation, whether in the public, private or voluntary sector, to tell the department responsible for purchasing items, that an item is required. Generally the form will offer information about the number of items that are required, the type of items and when the items are needed by.
However, there is other information that should be included to ensure that the Purchase Requisition Form (PRF) is as comprehensive as possible. The PRF is the trigger for the purchasing of items and needs to clearly show who authorised the purchase of goods and where the need originated, so that it can be retained if required for proof in the future.
If items are simply bought with no records kept then there is no proof of who bought the item, why they bought the item and who authorised it, in fact it would simply be unmanageable for companies to exist without purchase requisitions, especially if the company is a large one and it is hard to keep track of expenditure authorisations. It needs to have some key elements, but should not be overly complicated, or it will require too much administrative overhead.
Layout
The requisition requires the purchasing department to supply goods. So if an employee requires10,000 screws, then they would fill out a PRF. The layout of the form needs to include the following:
What is required: This section outlines exactly what is required. There needs to be room for the employee to describe or provide specification on what is required, so that the correct items are bought.
Quantity required: This part of the PRF indicates exactly how many are required. After all the purchasing department may not be familiar with end user requirements, so they have to be told the minimum of how many items are needed (note this may not be how many are procured due to Minimum Order Quantities dictated by the supplier).
Details of Supplier: Possible sources of supply need to be highlighted to support the purchasing department in obtaining price and delivery information. There are occasions when the purchasing department may hold details of suppliers for specific goods, so the supplier put forward may not be used.
Need by date: It is important to know when the items are required. If they are urgent then this needs to be highlighted but the delivery date does need to be included. If items have to be secured by a certain date then this has to be clearly stated within the form.
Budget information: The purchasing department will need to know how much money its authorised to spend coupled with what booking/cost code will be charged.
Who Authorised this: There is a need for a signature or electronic input as to who actually authorised this purchase. Then if there is a problem in the future, then it is clear who actually said that it was ok to purchase these items.
Any other information: This section should include any other relevant information that needs to be included for some specific orders. That could be information about the fragility of the goods requested or the way that they need to be transported or stored. It is the section where any ‘special needs’ can be highlighted.
Purchase Requisition Forms And Purchase Orders
A PRF is an internal document. It cannot be used to secure the actual goods and items themselves. It does not leave the organisation, whereas a purchase order is an order between two companies and leaves one company to be received by another, even if this is done electronically. A PRF cannot be used outside the company but simply is a clear record of what was purchased and who instigated the order.
Oct
8
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.