What is Requisition?
A requisition is a formal request made by an employee or department within a company to procure goods or services. It serves as the first step in the procurement process, ensuring proper authorization and record-keeping before proceeding with a purchase.
Key Points About Requisition:
- Purpose:
- It initiates the purchasing process by requesting necessary items or services.
- Helps maintain organized internal records and budget control.
- Difference from Purchase Order:
- A requisition is the request for approval to purchase, while a purchase order is the document used to finalize and execute the purchase.
- A requisition always precedes a purchase order.
- Importance in Organizations:
- Facilitates clear communication between departments.
- It helps large organizations manage accounting and finances more efficiently.
The Requisition Process:
- Filling Out a Requisition Form:
- The requesting employee or department completes a requisition form specifying the required goods or services.
- Submission for Approval:
- The form is submitted to the finance or procurement department for review and approval.
- Authorization:
- The requisition is either approved or returned for clarification or adjustments.
- Transition to Purchase Order:
- Once approved, the requisition is converted into a purchase order to proceed with the purchase.