A purchase requisition is a formal document completed by a user department within an organization to request the purchase of specific items from the purchasing department. This document is essential in ensuring that purchases are well-documented, controlled, and within the organization’s budget.
Historical Context
The concept of a purchase requisition has its roots in early 20th-century business practices. As companies grew larger and more complex, the need for a formal system to manage purchasing requests became evident. The advent of modern inventory and procurement systems in the late 20th century further emphasized the importance of purchase requisitions in organizational procurement processes.
Types/Categories
- Standard Purchase Requisition: For everyday items and routine purchases.
- Special Purchase Requisition: For one-time purchases or items not usually stocked.
- Blanket Purchase Requisition: Covers multiple deliveries over a specific period.
Key Events in the Evolution of Purchase Requisitions
- Early 1900s: Introduction of formalized purchasing processes.
- 1950s-1960s: Development of procurement departments within large corporations.
- 1980s-1990s: Integration of computerized systems for procurement and inventory management.
- 2000s-Present: Transition to digital and automated requisition systems.
Detailed Explanations
A purchase requisition typically includes:
- Quantity: The amount of each item needed.
- Specifications: Detailed description of the items.
- Possible Supplier: Recommended vendor or supplier.
- Date Required: When the items are needed.
- Delivery Point: Location where the items should be delivered.
Importance and Applicability
Purchase requisitions are crucial for:
- Budget Control: Ensuring expenditures are within approved budgets.
- Inventory Management: Keeping track of stock levels and preventing shortages or overstocking.
- Audit Trail: Providing a clear record for financial audits.
Example
graph TD
A[Department] -->|Creates Requisition| B[Purchasing Department]
B -->|Approves/Revises Requisition| C[Vendor]
C -->|Supplies Goods| D[Department]
D -->|Acknowledges Receipt| B
Considerations
- Approval Hierarchy: The requisition should pass through necessary approval channels.
- Accuracy: Details in the requisition must be precise to avoid errors.
- Compliance: Adhering to organizational and legal purchasing policies.
Related Terms with Definitions
- Purchase Order (PO): A document issued by the buyer to the seller, indicating types, quantities, and agreed prices for products or services.
- Invoice: A bill sent by the seller to the buyer, detailing goods or services provided and requesting payment.
Comparisons
- Purchase Requisition vs Purchase Order:
- A purchase requisition is an internal document requesting approval to buy.
- A purchase order is an external document sent to a vendor to procure goods or services.
Interesting Facts
- In large organizations, hundreds or thousands of purchase requisitions can be processed daily.
- Some modern systems allow for automated purchase requisition generation based on stock levels.
Inspirational Stories
During World War II, efficient purchase requisitions and procurement processes were crucial in managing supplies for military operations, illustrating the importance of streamlined purchasing systems in critical situations.
Famous Quotes
“Good procurement systems are not a cost; they are a means of saving money.” - Peter Drucker
Proverbs and Clichés
“Measure twice, cut once” – Emphasizing the importance of accuracy in procurement processes.
Expressions, Jargon, and Slang
- PR: Common shorthand for Purchase Requisition.
- E-procurement: The use of electronic systems in the procurement process.
FAQs
What information is typically required in a purchase requisition?
Who approves a purchase requisition?
References
- “Procurement and Supply Chain Management” by Kenneth Lysons and Brian Farrington.
- “Purchasing and Supply Chain Management” by Robert M. Monczka, Robert B. Handfield, and Larry C. Giunipero.
Summary
A purchase requisition is a critical document within the procurement process, ensuring that purchases are well-planned, controlled, and aligned with the organization’s strategic goals. By maintaining detailed records and providing a clear audit trail, purchase requisitions help organizations manage their resources effectively and efficiently.
