Requisition
Definition:
A requisition is a formal internal request to purchase goods or services, typically submitted by an employee or department to the procurement team. It specifies the items or services needed, the quantity, the required delivery date, and any other relevant information. The requisition is the first step in the procurement process and must be approved before a purchase order can be issued to a supplier.
Example:
A marketing manager at Acme Corporation needs to purchase new promotional materials for an upcoming trade show. They fill out a requisition form, specifying the type and quantity of items needed, such as brochures, banners, and giveaways, along with the required delivery date and budget. The requisition is then routed to the appropriate approvers, such as the department head and the procurement team, who review the request and ensure it aligns with company policies and budgets. Once approved, the procurement team uses the requisition to create a purchase order and place the order with a supplier.
Why is a Requisition important to Procurement?
Requisitions are an essential tool for procurement teams to manage and control the purchasing process. They provide a standardized way for employees to communicate their purchasing needs and ensure that all necessary information is captured upfront. Requisitions also serve as an important control point, allowing the procurement team and other stakeholders to review and approve requests before committing to a purchase. This helps to prevent unauthorized or unnecessary spending, ensure compliance with procurement policies and budgets, and provide visibility into the organization's purchasing activities. Procurement teams can use requisition data to analyze spending patterns, identify opportunities for consolidation or standardization, and plan their sourcing activities more effectively.