What Is a Purchase Requisition Form? A Guide

Being a small business owner comes with a wide range of responsibilities. And if your business is at a time where it’s on a tight budget, dealing with cash flow issues can be a challenge. You always want to be vigilant with your business purchases and cut out any unnecessary expenses.

Purchase requisition forms are a great way to make sure any purchases are integral to business operations. It’s an important element of the requisition process and it’s worth knowing how it all works. Let’s take a closer look at what a purchase requisition form is and the advantages of using them.

Here’s What We’ll Cover:

What Is a Purchase Requisition Form?

How Does the Purchase Requisition Form Process Work?

What Are the Advantages of a Purchase Requisition Form?

Key Takeaways

What Is a Purchase Requisition Form?

A purchase requisition form can also get referred to as a purchase request or PR. It’s an internal document that gets used to request that your business makes a purchase. Simply put, you can use a requisition form to help describe exactly what the purchase is, why it’s necessary and how it can benefit the business.

Once the form gets submitted, it will get reviewed by someone else in the company, such as a department head. They will look over and review the purchase requisition form. If the purchase gets denied, the person who is approving the forms will provide an explanation as to why it was denied.

If it’s approved, the purchase requisition form then becomes a purchase order, or a PO, that gets sent to a vendor or supplier.

How Does the Purchase Requisition Form Process Work?

It’s going to depend on the type of business you operate, but most purchase requisition forms will follow a similar process. This is how the process could work.

1. An employee will find and obtain the purchase requisition form. If your company uses e-procurement then the employee can log in to the system and request an electronic form.
2. The employee will then fill out the form in its entirety. They will include information about the purchase, why it’s necessary and what benefits the business can receive from the purchase. For example, an employee might fill out and submit a purchase requisition form to request a new office chair since theirs broke.
3. Once the form is completed, it will get submitted and sent to the approver. They will then review the requisition form and either approve or deny the purchase. If it isn’t approved, there will usually be a short explanation as to why.
4. Sometimes a purchase requisition form needs to get sent to another person to confirm the details. For example, an employee might submit a purchase requisition form for a new laptop. In this case, the form might get sent to your IT department to make sure the new laptop is compatible with data security standards.
5. If the purchase requisition gets approved, it will then get sent to the procurement department who will source the purchase. The procurement department will also change it from a purchase requisition form into a purchase order.
6. The purchase order will get sent to the vendor or supplier as a formal request, and the purchase gets made.

What Are the Advantages of a Purchase Requisition Form?

There can be lots of benefits to using a purchase requisition form. The biggest advantage might be that it creates a level of transparency in your business to make sure every purchase is justified and needed. This helps to avoid overspending on expensive items that you might not need.

And this is especially the case if there are more affordable products out there that can still meet the needs of your business. Plus, the procurement department can build relationships with vendors and suppliers to get better deals in the future. In return, this can lead to more savings for your business.

Key Takeaways

While purchase requisition forms can be incredibly helpful, it’s worth noting that they’re not always necessary. This can especially be the case for small businesses. For example, if you only have a few employees then there might not be a need to have an in-depth requisition process.

You could also set up a process where smaller purchases, or purchases of a certain amount, can get approved by a department head. This can help avoid any delays, confusion or mistakes in the process. It will help you become more efficient and ensure any purchases will benefit your business.

When an employee submits a purchase requisition form, they will include details about what the purchase is. These details will also include reasoning as to why the purchase is necessary and how it’s going to provide additional benefits.

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