Purchase Requisition (PR)

Definition

Purchase Requisition (PR) is an internal document or system transaction used to formally request the purchase of goods or services, capturing the business need, quantity, timing, budget allocation, and approval information before a purchase order is created.

What is a Purchase Requisition (PR)?

A purchase requisition is the first formal step in many controlled procurement processes. It is created by an employee, department, or system to signal that something needs to be purchased and that the request should move through internal review before the organization commits to a supplier.

In practice, a PR contains the requirement details, preferred supplier if known, delivery location, cost center, account code, requested date, and supporting justification. Approval workflow checks whether the request fits budget, authority levels, and procurement policy. Once approved, the requisition can be converted into a purchase order or routed into sourcing activity.

Purchase requisitions are widely used for indirect spend, capital requests, project purchases, maintenance needs, and service engagements. They are less about supplier communication and more about internal control, demand visibility, and budget discipline.

How a Purchase Requisition Works

The process starts when a requester identifies a need and enters the requirement into a procurement system. If the item exists in an approved catalog, the requester may simply select it and submit the basket. If the requirement is noncatalog or complex, the requester enters specifications, estimated cost, and attachments.

The system then routes the requisition through approval steps based on value, category, business unit, or project structure. Procurement may review supplier selection, category strategy, or contractual coverage before converting the PR into a purchase order. The approved requisition therefore acts as the internal authorization that precedes an external buying commitment.

Key Information in a PR

A strong PR records what is needed, how much is needed, when it is needed, where it should be delivered, and which business unit will pay for it. It may also record technical specifications, sourcing notes, supplier suggestions, tax treatment, and project references. In service procurement, the request can include scope, milestones, duration, and rate assumptions.

These details matter because they determine whether the request can be sourced efficiently and whether the resulting PO and invoice can be matched correctly. Poorly written requisitions create downstream clarification work, approval delays, and coding errors.

Purchase Requisition vs Purchase Order

A purchase requisition is an internal request for authorization to buy. A purchase order is an external document sent to the supplier after that authorization has been granted. The requisition asks the organization for permission. The purchase order instructs the supplier to deliver. Treating them as the same document removes an important internal control step.

Why Purchase Requisitions Matter

PRs matter because they give procurement and finance visibility into demand before money is committed. They support budget checking, policy compliance, approval accountability, and early sourcing intervention. In organizations without disciplined requisitioning, procurement often sees demand only after the invoice arrives, which reduces control over price, supplier choice, and contract use.

Frequently Asked Questions about Purchase Requisition (PR)

Why do companies use purchase requisitions instead of letting employees buy directly?

Companies use purchase requisitions to ensure that demand is visible and authorized before the organization commits to spend. Direct buying may feel faster for the requester, but it creates budget leakage, policy breaches, and fragmented supplier usage. A requisition gives the business a chance to check approved suppliers, validate accounting treatment, and route the request through the right level of approval before any order is issued.

Can a purchase requisition be created without knowing the supplier?

Yes. In many organizations, a purchase requisition is created before the supplier is selected. This is common when the request must go through competitive sourcing, technical review, or procurement-led supplier selection. The PR captures the need, estimated value, and business context, while procurement later determines the supplier through an existing contract, quotation process, or sourcing event. That sequence helps separate demand approval from supplier award.

What makes a purchase requisition incomplete or poor quality?

A poor quality requisition usually lacks enough detail for approval or sourcing. Common issues include vague descriptions, missing quantities, no requested date, incorrect cost center coding, absent attachments for technical items, or unclear business justification. Weak requisitions slow down the process because approvers and buyers need to request clarification before moving forward. Over time, poor intake quality also reduces spend data reliability because similar purchases are coded inconsistently.

Does every purchase need a purchase requisition?

Not always. Some low value, low risk categories may be bought through p cards, expense claims, or automated recurring orders. Many organizations also allow direct catalog ordering with embedded approvals that effectively combine shopping and requisitioning in one step. The need for a PR depends on policy, control design, and system configuration. However, where there is no other approved intake mechanism, the purchase requisition is usually the primary way to formalize internal demand.