While there is an overlap between a Purchase Order (PO) and a requisition, they are as different as chalk and cheese! A PO Requisition is more of an internal document sent to approvers. And is not a legally binding contract yet, as it is not sent to the suppliers.
Let’s say company X is multinational with many departments. Each department of X has its own budgets. Still, has to send a Purchase requisition to the finance department every time there is a need to purchase something. So it is a request to purchase something.
A PO on the other hand is a formal agreement between your company and a supplier concerning the procurement of goods.
In the interest of clarity, the business dictionary defines a purchase requisition as a document generated by a user, department or storeroom personnel to notify the purchasing department of items they need to order, highlighting their quantity, price, and timeframe.
Generally, purchase requisitions differ from one company to another. Multinational companies often follow a complex procedure due to their size and scale. For instance, there may be requisitions that are sent to approvers for products that are used internally, and another set of requisitions for those that are used externally.
On the other hand, small businesses may follow a simpler requisition procedure. In most cases, the owner of the business is the main approver or he could appoint another person as an alternative approver.
Key benefits of PO requisitions:
- To help companies spend within budget all the time.
- To minimize invoice fraud risks.
- Enable decision makers to be in control of their budgets.
Purchase requisition form
Each company often adopts unique methods of processing orders, but more or less every company uses a requisition form. It typically comes in paper or digital format and is rarely done verbally because of the need for evidence of approval. Companies that still use paper-based systems typically spend a lot of time filling (and losing) multiple forms for several PO requests.
However, technology has made sending purchase requisitions quite straightforward. Purchase order automation software like Procurementexpress.com can save companies a lot of time by giving them custom approval rules in a matter of minutes.
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The benefits of a digital purchase requisition
Companies that have adopted the use of digital purchase requisitions are reaping huge benefits and your company can too! By using a PO system like Procurementexpress.com, the requisition approval process can be accelerated in an amazing way. Procurementexpress.com allows approvers to get an instant alert on their mobile phones every time a purchase requisition is sent to them. It is a cloud-based, so works anywhere, everywhere and on the go.
Processing POs have never been this easy!
After your team has identified the company’s purchasing need, they will calculate how much the product costs and from who they will be purchasing it. Once your team is satisfied with the quality, supplier reputation and the price they will create a PO request.
This is how they can do this using a simplified PO software like the Procurementexpress.com: They will log into the Procurementexpress.com app or website using their unique username and password. When they look on the far right-hand of the screen, they will see a “+New Purchase Order” button to create a new purchase order and click on it to create a purchase order. Easy!
What’s interesting about Procurementexpress.com is that all the stages of processing a PO are completely visible to everyone. Not only that, users can log in by entering one of the following details into the search facility: ProcurementExpress.com or app.ProcurementExpress.com or by using their Google address. Processing orders have never been this easy!
Sign up for a free trial today! Procurementexpress.com’s team is available 24/7 to take you every step of the way.