Blog · Purchase order basics
Purchase requisition vs purchase order
A purchase requisition is an internal request to spend money: someone in the team asks for something and a manager agrees. A purchase order (PO) is the external document that follows. It goes to the supplier and commits the business to buy. The requisition asks the question, the approval answers it, and the order carries that answer to the supplier. Keep them in that order and spending is agreed before it’s committed.
Internal versus external
The simplest way to tell them apart is to ask who reads each one. A requisition is read by people inside your business: the person who signs it off, and perhaps finance. The supplier never sees it. A purchase order is written for the supplier. It tells them exactly what you want, at what price, where to deliver it and which number to quote on their invoice.
That difference shapes everything else. A requisition can be rough: an estimate, a link to a product page, a line saying why it’s needed. A purchase order has to be exact, because once the supplier accepts it, it commonly forms part of the contract between you. Changing a requisition is an internal conversation. Changing a purchase order means going back to the supplier.
You’ll also see a requisition called a purchase request, a requisition form or simply a req. They all mean the same thing.
Who raises each, and what sits between them
The requisition is raised by whoever needs the thing: a site supervisor who needs a part, an office manager who needs a printer, an engineer who needs a software licence.
The purchase order is raised by whoever is allowed to commit the business to spend. In a larger organisation that’s a buyer or a purchasing team. In a smaller one it might be the finance person, the owner, or the requester once they have a yes.
Between the two sits approval. Someone with the authority to spend that amount looks at the request and agrees or declines. Most businesses tie this to the value: a supervisor can approve small purchases, a manager larger ones, a director anything above that. Those amounts are your approval limits, and they’re the heart of the process. Without it, a purchase order is just someone placing an order.
One purchase, from need to order
Here’s how it plays out in a fictional vehicle workshop. The pressure washer used to clean vehicles has failed, and the workshop supervisor needs a replacement this week.
- The need. The supervisor gets a quote from a regular supplier: £1,180 excluding VAT, delivered to the workshop on Thursday.
- The requisition. They raise a purchase request with what’s needed, why, the supplier, the price and the delivery date, and attach the quote. Their own limit is £500, so they can’t sign it off themselves.
- The approval. The request goes to the operations manager, whose limit is £2,500. She checks the washer is needed and the price looks right, then approves it. Her decision and the time are recorded against the request.
- The purchase order. The approved request becomes purchase order PO-0142: the business’s legal name and VAT number, the supplier’s details, one line for the pressure washer, the price, VAT, the total and the delivery address.
- The send. The PO goes to the supplier by email. The supplier delivers against PO-0142 and quotes that number on its invoice, so finance can see the invoice matches something that was agreed.
What goes on a requisition
The aim is to give the approver everything they need to say yes or no without asking a follow-up question. An attached quote saves a day of back and forth.
- Who is asking, and for which part of the business: team, site, branch or project
- What’s needed: a description, the quantity and, where there is one, an item code
- Why it’s needed, in a sentence
- The supplier, if known, and the estimated or quoted price
- When it’s needed and where it should go
- Supporting documents: the quote, a photo of the broken part, a copy of the product page
What goes on a purchase order
A purchase order has to stand on its own: the supplier should be able to fulfil it, and finance check the invoice against it, without any other context.
- A unique PO number and the date it was issued
- Your business’s legal name, address and VAT number
- The supplier’s name and address
- Each line: description, quantity, unit price and tax
- The total, with tax shown separately
- The delivery address and the date you need it
- Payment terms, and who to contact with questions
Side by side
The short version: the requisition is a question to your own business, and the purchase order is an instruction to someone else’s.
| Purchase requisition | Purchase order | |
|---|---|---|
| Who reads it | People inside the business | The supplier |
| Raised by | The person who needs the item | A buyer, finance, or the requester once approved |
| When | Before anyone agrees to spend | After the spend is approved |
| Purpose | Asks for permission | Places the order |
| Prices | Estimated or quoted | Agreed and exact |
| Binding | No | Commonly yes, once the supplier accepts it |
| Reference | An internal reference | A PO number the supplier quotes back |
Why small teams skip the requisition
In a team of ten, a requisition can feel like bureaucracy. The person who needs the part phones the supplier, the supplier sends it, and the invoice arrives a fortnight later. Often the same person asks, agrees and orders. Nobody sets out to skip a control; it just never seemed worth a form.
For a while that works, because the owner sees most invoices and knows most suppliers.
What skipping it costs
The cost shows up as the team grows, or the week the owner is away.
- Spending is committed before anyone agrees to it. The first time a manager sees the purchase is when the invoice arrives, and by then the goods are on site.
- Approval lives in chat and email. “Go ahead” in a message thread is hard to find six months later, and harder to prove.
- Nobody can see what’s on order. Two people order the same thing because neither knew the other had.
- Invoices arrive with nothing to check them against. Without an agreed order, finance has to chase the requester to confirm the price and quantity.
- Limits exist only on paper. If purchases over a set amount need a director but there’s no step where that happens, the rule isn’t doing anything.
Keeping the step light
The answer isn’t a three-part paper form. A requisition can be a short request with the quote attached, routed by amount to the person who can approve it. If the purchase order is produced from the approved request rather than typed up again, the extra step costs the requester a minute and gives everyone else a record of who agreed to what.
Small purchases can stay simple. Many businesses set a level below which a request needs no approval at all, so the process only slows down what deserves a second look.
Questions
Is a purchase requisition the same as a purchase request?
Yes. The terms are used interchangeably, along with requisition form and req. Whatever you call it, it’s the internal request that comes before the order.
Is a purchase requisition legally binding?
No. It’s an internal document and the supplier never sees it. The commitment comes with the purchase order, which commonly becomes binding once the supplier accepts it; check with your accountant or legal adviser how this applies to your own terms.
Can you raise a purchase order without a requisition?
Yes, and plenty of businesses do, especially for repeat orders from regular suppliers. The risk is that nobody other than the buyer agreed the spend. If you skip the requisition, make sure whoever raises the order has the authority to commit that amount.
Who approves a purchase requisition?
Usually a line manager or budget holder, chosen by the amount. Larger amounts go to someone more senior. Writing these levels down as approval limits means requesters know in advance who will see their request.