Purchase Requisition: The Complete Guide

What a purchase requisition includes

A purchase requisition is the internal request that kicks off a purchase before anyone contacts a supplier. A well-formed one typically includes:

• What's being requested, and in what quantity
• An estimated cost
• The budget or cost center it should be charged against
• A brief justification — why this purchase is needed
• A preferred or suggested vendor, if one exists
• How urgently it's needed

The requester submits this, and it routes to whoever needs to approve it before procurement or purchasing acts on it. Everything after approval — vendor selection if not already specified, PO issuance, delivery — happens downstream of this single request.

Requisition vs purchase order: the actual distinction

This is the single most common point of confusion in purchasing terminology, and the distinction is simple once it's stated plainly: a requisition stays inside the company. A purchase order goes outside it, to the supplier. The requisition is a question — "can I buy this?" The purchase order is an answer that's already been said yes to, formalized into a document a supplier can act on.

A requisition can be rejected, modified, or sent back for more information without anyone outside the company ever knowing it existed. A purchase order, once accepted by a supplier, is a binding commitment. That's why the approval step matters — it's the last checkpoint before a request becomes a real financial obligation.

How approval routing usually works

Most organizations route requisitions based on a combination of dollar amount and category, not a single flat rule. A reasonable, commonly used structure looks something like:

• Below a small threshold — direct manager approval, often same-day
• Mid-range amounts — department head or budget owner sign-off
• Larger amounts — finance or procurement leadership approval
• Certain categories regardless of amount — software with data access, or anything touching compliance, often needs an extra security or legal review step

The specific thresholds matter less than having them clearly defined and consistently applied. Ambiguous routing — "just ask whoever seems relevant" — is exactly what causes the slow, opaque approval delays that frustrate requesters and push people toward buying around the process entirely.

When it's reasonable to skip a formal requisition

Requiring a full requisition workflow for a $40 office supply order usually creates more friction than it prevents risk. Many companies set a low-dollar threshold below which employees can purchase directly on a company card, reserving the formal requisition process for spend above that line, or for specific higher-risk categories regardless of amount. This isn't a loophole — it's a deliberate trade-off that keeps the formal process focused on the purchases that actually warrant scrutiny.

Getting that threshold right, and making the requisition process itself fast enough that people don't feel compelled to route around it, is one of the more practical improvements available to a growing procurement function. Our procurement glossary covers requisitions alongside the other core documents in the buying cycle if you want the shorter, reference-style version.