What is a purchase requisition?

Definition

A purchase requisition is an internal request to buy something, submitted before a purchase order is issued. It is a note from the person who needs the goods to the person who is allowed to buy them.

The requisition is not a journal. It does not raise inventory, a payable, or an expense, and those later documents sit on other pages.

Where it shows up

Balance Sheet: Related to nothing sitting as an account until goods arrive or a bill is recorded.

P&L: Related to nothing extra until the purchase is earned as expense or inventory.

Cash flow: Related to nothing extra until a later payment.

See also: Purchase Order · Approval Workflow · Spend Policy

When you look at the Balance Sheet, you will not find a requisition caption. Nothing sits as an asset or a liability until goods arrive or a bill is recorded.

The Income Statement is likewise quiet. Expense or inventory cost is earned only after the later purchase is received or used.

The Statement of Cash Flows is not touched by the request. Cash moves only when a later bill is paid.

The request lives in an approval queue, a shared inbox, or a paper form. It is an internal document, not a line on the published statements.

How it works

Someone who needs goods or a service writes down what they want, how many, and why. A cafe baker asking for 50 pounds of flour is making this request, not yet placing an order with the mill.

The request then routes to the people who must sign off. Dollar limits, budget remaining, and the written spend rules decide who has to approve.

If the request is denied, nothing is ordered. If it is approved, the buyer can issue a purchase order to a vendor at agreed terms.

The vendor never has to see the requisition. It is an inside document, and the order that goes outside is a later step.

Keeping the request separate from the order splits the need from the buy. The person who wants the flour is not the same person who commits the company to the mill.

The later bill and the later payment are still further down the path. This page stays on the internal request.

A complete request names the item, the quantity, the needed date, and a rough cost. Missing those details is how an approval stalls, or how the later order is placed for the wrong bag of flour.

Example

The baker at a neighborhood cafe needs 50 pounds of flour before the weekend rush. She fills out an internal request naming the mill, the quantity, and a $40 estimate.

The owner reviews the request against the week's food budget. He approves it the same morning.

No flour has arrived. No bill has been entered, and cash has not moved.

Only after approval does the owner send the mill an order. The requisition is the inside ask that made that later order allowed.

If the owner had said no, the baker would not order the flour. The request would sit as a denied form, still with no effect on the statements.

Common mix-ups

A requisition is not a purchase order. The requisition is the inside ask, and the purchase order is the document that authorizes the vendor to supply the goods at agreed terms.

It is also not a vendor bill. The bill arrives after the goods or the service, and that is when a payable is recorded.

Do not treat an approved request as a booked expense. Approval only allows someone to order, and the books wait for receipt or the bill.

Related terms

• Purchase Order: The document authorizing a purchase from a vendor at agreed terms.
• Approval Workflow: The routing of a request or bill through the people who must sign off.
• Purchase Approval Limit: The dollar threshold at which a purchase needs a higher level of sign-off.
• Spend Policy: The written rules for what employees may buy and how it must be approved.
• Vendor Master File: The maintained record of each supplier's details, terms, and payment information.
• Segregation Of Duties: Splitting recording, approving, and payment tasks so no one person controls a transaction end to end.
• Budget Versus Actual: The comparison of planned amounts to what actually happened.
• Vendor Bill: The invoice a supplier sends that becomes a payable.