Purchase Requisition — Definition, Process + Example

What is a Purchase Requisition?

A purchase requisition is an internal request used to ask for approval to buy goods or services before placing an order with a supplier. It marks the formal start of the procurement process.

The requisition describes what is needed, why it is required, and the estimated cost, then moves through internal approvals such as management, finance, or procurement.

Its purpose is to control spending, validate business needs, and ensure compliance. Once approved, it is converted into a purchase order, which is sent to the supplier.

How a Purchase Requisition Works

A purchase requisition follows a structured internal workflow that captures a purchasing need, routes it for review, and secures approval before any order is placed with a supplier. While processes may vary by organization, the core steps are largely the same.

The workflow starts when an employee or department identifies a need that cannot be met through existing stock or contracts. The requester submits a requisition with key details such as item description, quantity, estimated cost, justification, and required delivery date. At this stage, the requisition is a request only, not an approval.

The requisition then moves through internal approvals, typically involving the line manager, finance for budget validation, and procurement for policy and supplier compliance. Once approved, procurement converts the requisition into a purchase order (PO), which formalizes pricing, quantities, and delivery terms and is sent to the supplier.

By acting as an internal control point, the purchase requisition ensures that every PO is justified, approved, and aligned with budgets and policies before any financial commitment is made.

The 9 Steps of the Purchase Requisition Workflow

A purchase requisition follows a structured sequence from identifying a need to issuing a purchase order. While the exact workflow may vary by organization, the 9 steps below reflect how requisitions are typically handled in practice and explain not only what happens, but why each step matters.

1. Identify the Need

The process starts when an employee or department recognizes a requirement that cannot be fulfilled through existing inventory, framework agreements, or active contracts.

This might include replacing worn-out equipment, onboarding new employees who need software licenses, or securing external services for a specific project.

For example, a warehouse supervisor realizes that safety gloves are running low and the current stock will not last through the next production cycle.

2. Create the Purchase Requisition

Once the need is confirmed, the requester creates a purchase requisition. This step translates the need into a structured request by documenting what is required, in what quantity, and by when.

A well-prepared requisition typically includes specifications, estimated cost, justification, and sometimes suggested suppliers. For example, an IT manager requesting laptops may include technical requirements and reference a preferred vendor to speed up procurement review.

3. Submit the Requisition for Approval

After completion, the requisition is formally submitted to the approval workflow. This step ensures the request is visible to all relevant stakeholders and enters the company’s internal control system.

For example, a marketing coordinator submits a requisition for campaign materials through the procurement system instead of emailing the request informally.

4. Managerial Review and Validation

The requester’s line manager reviews the requisition to confirm that the purchase is operationally justified and aligned with departmental priorities. If details are missing or unclear, the requisition may be returned for clarification.

For example, a team lead questions whether ten licenses are needed immediately or if five would be sufficient for the current phase of the project.

5. Finance and Budget Approval

Once operationally approved, the requisition is checked by finance or the budget owner. This step focuses on financial feasibility: confirming budget availability, validating cost estimates, and ensuring the expense aligns with financial plans.

For example, a marketing campaign requisition may be approved operationally but delayed if it exceeds the allocated quarterly budget.

6. Procurement Policy and Compliance Review

Procurement reviews the requisition to ensure compliance with purchasing policies, preferred supplier lists, and existing contracts. This is often where procurement adds value by suggesting approved suppliers, negotiating better pricing, or consolidating demand with similar requests.

For instance, procurement may redirect a requisition to an existing framework agreement instead of initiating a new supplier engagement.

7. Final Approval and Authorization

After all required checks are completed, the requisition receives final approval and becomes an authorized request. For example, a high-value equipment purchase receives final sign-off from senior management due to its impact on annual capital expenditure.

8. Convert Requisition into a Purchase Order (PO)

Procurement converts the approved requisition into a purchase order, finalizing pricing, quantities, delivery terms, and contractual conditions. For example, procurement generates a PO using the approved requisition details, ensuring all specifications are carried over accurately.

9. Issue the Purchase Order to the Supplier

The purchase order is sent to the supplier, who reviews and accepts it. Once accepted, it becomes a legally binding agreement. For example, a supplier confirms the PO and provides an expected delivery date, allowing operations to plan accordingly.

The 7 Key Differences Between Purchase Requisition and Purchase Order

To clearly highlight the seven key differences between these two documents, the table below compares their purpose, usage, timing, and legal role within the purchasing workflow.

What to Include in a Purchase Requisition

A purchase requisition should contain all key information needed to review, approve, and process a request efficiently. The elements below form the core of a complete requisition. or other attachments that clarify the request. Including these elements ensures faster approvals, fewer clarifications, and accurate conversion of the requisition into a purchase order.

• Requester and Department – Identifies who is requesting the purchase and which department is responsible for the cost.
• Description of Goods or Services – Clearly defines what is being requested, including basic specifications or scope where relevant.
• Quantity – Specifies the number of items or level of service required.
• Required Delivery Date – Indicates when the goods or services are needed to support planning and prioritization.
• Estimated Cost – Provides an approximate value to support budget validation, even if the final price is not yet known.
• Cost Center or Budget Code – Ensures the expense can be correctly allocated and tracked by finance.
• Business Justification – Explains why the purchase is needed and how it supports operational or strategic objectives.
• Preferred Supplier or Contract Reference (if applicable) – Helps procurement assess whether existing suppliers or agreements can be used.
• Supporting Documents (if required) – Includes quotes, specifications, scopes of work,

The 6 Benefits of Using Purchase Requisitions

The table below highlights the six key benefits, explains each one, and shows the practical outcome for the organization.

6 Common Challenges with Purchase Requisitions

Even well-designed requisition processes can face practical issues if policies, tools, or user training are unclear. The table below highlights the most common challenges, why they occur, how they can be resolved, and who is most affected.