luckpandaTL;DR: A purchase requisition (PR) is an internal request, made by an employee or department, for permission to buy goods or services. Once a budget owner approves it, purchasing turns it into a purchase order (PO) for the supplier. The requisition stays inside the company and does not bind anyone; the PO goes outside and does.
A purchase requisition is an internal document that asks for approval to spend money on something the business needs, before anyone contacts a supplier. Microsoft's Dynamics 365 documentation puts it plainly: "A purchase requisition is an internal document that authorizes the Purchasing department to buy items or services." It records who needs what, how many, roughly what it will cost, which budget pays, and why. Requisitions (often just "requisitions" or "reqs") are the first step of the procure-to-pay cycle: requisition, approval, purchase order, goods receipt, supplier invoice, payment.
What does requisition mean?
A purchase requisition is a request to spend, not an order. It answers three questions for the approver: is this needed, is there budget, and is the price reasonable. Only when the answer to all three is yes does the business commit to a supplier.
In everyday use:
- Requisition (from Latin requisitio, a demand) is the general word for any formal internal request, such as a stock requisition to the store room or a job requisition to HR.
- Purchase requisition is the specific request to buy from outside.
- Requisitioner or requester is the person who raises it; the preparer may enter it on their behalf.
Requisition vs purchase order: what is the difference?
A purchase requisition asks for permission to buy and stays internal; a purchase order commits to buy and is sent to the supplier.
| Purchase requisition (PR) | Request for quotation (RFQ) | Purchase order (PO) | |
|---|---|---|---|
| Purpose | Get approval to spend | Get prices from suppliers | Place the order |
| Who sees it | Requester, approvers, purchasing, finance | Two or more suppliers | One supplier |
| Legally binding | No | No | Yes, once the supplier accepts |
| Created by | Any employee with permission | Purchasing | Purchasing |
| Price | Estimated | Asked for | Agreed |
| Typical number | PR-2026-0142 | RFQ-2026-0031 | PO-2026-0098 |
| Next step | RFQ or PO | Supplier selection | Goods receipt, then invoice |
The RFQ step is optional: if the item is from a catalogue or an agreed supplier, the approved PR goes straight to a PO. Many systems carry the PR number onto the PO so that the two are filed together and the audit trail is unbroken.
Which fields belong on the form?
A purchase requisition should carry enough detail that the approver can decide without asking a follow-up question. The usual fields:
| Field | Example | Why it matters |
|---|---|---|
| PR number and date | PR-2026-0142, 13/10/2026 | Unique reference for the audit trail |
| Requester and department | A. Shah, Operations | Who to ask, whose budget |
| Item description and specification | 24-inch monitor, 1920 x 1080, HDMI | Purchasing can buy the right thing |
| Quantity and unit | 4 pieces | Basis for the estimate |
| Estimated unit price and total | ₹11,500 per piece, ₹46,000 before GST | Checked against budget and approval limits |
| Cost centre and GL account | CC-OPS-02, 5410 Office equipment | Posts the spend to the right budget |
| Suggested supplier | Existing vendor or "any" | Purchasing may still run an RFQ |
| Required-by date and delivery location | 31/10/2026, Pune office | Lead time planning |
| Business justification | Replacing 4 failed monitors | Lets the approver judge need |
| Attachments | Quote, specification sheet | Evidence for the estimate |
The US Federal Acquisition Regulation treats the requisition as a recognised place to keep purchase records: FAR 13.303-5(e)(3) lets buyers record "date, supplier, supplies or services, price, delivery date" on the purchase requisition when no paper order is issued.
What are the steps, from need to PO?
The purchase requisition process has six steps:
- Identify the need. An employee notices the requirement: stock below its reorder level, say 20% of the usual monthly use, a broken machine, a new project.
- Raise the requisition. The requester or a preparer fills in the PR form or system screen (in SAP ERP the transaction code is ME51N; in Dynamics 365 it is the "My purchase requisitions" page).
- Route for approval. The PR goes to the approvers its amount and category require: the line manager, then the budget owner, then finance above a set value.
- Budget check. Finance confirms the cost centre has unspent budget for the amount.
- Source. Purchasing either picks an agreed supplier or runs an RFQ with two or more suppliers.
- Convert to a purchase order. The approved PR becomes a PO (SAP transaction ME21N) and the PR is closed.
What do Draft, In review and Approved mean?
A purchase requisition status tells you where the request sits in approval. Dynamics 365 uses six statuses, and most systems use something close:
| Status | Meaning | What you can do |
|---|---|---|
| Draft | Created, not yet submitted | Edit freely |
| In review | Submitted, waiting on one or more approvers | Recall the whole PR to edit |
| Rejected | An approver said no | Change and resubmit |
| Approved | All review steps complete | Purchasing can create the PO |
| Cancelled | Approved but no longer needed | Nothing; only approved lines can be cancelled |
| Closed | PO (or other fulfilment document) created | Track the PO instead |
Two details from the Dynamics 365 documentation catch people out: you recall or submit a requisition as a whole document, not one line at a time, and resubmitting a rejected line restarts review for every line still in review.
How should approval limits work?
An approval matrix routes each requisition by amount, so small buys move fast and large ones get senior eyes. Dynamics 365 routes a PR to the requester's manager when "the amount of the purchase requisition exceeds the requester's spending limit", and to a group manager above the department manager's signing limit. A simple matrix for a small business:
| PR value (before tax) | Approvers | Target turnaround |
|---|---|---|
| Up to ₹10,000 | Line manager | 1 day |
| ₹10,001 to ₹1,00,000 | Line manager, then finance | 2 days |
| ₹1,00,001 to ₹10,00,000 | Line manager, finance, then a director, with 3 quotes attached | 5 days |
| Above ₹10,00,000 | Director plus a second director, formal RFQ | 10 days |
These bands are an example; set yours from your own budget and risk. Two rules make any matrix work: approvals are judged on the total for the need (so a ₹1,20,000 purchase cannot be split into two ₹60,000 PRs to dodge a band), and nobody approves their own requisition.
When can you skip one?
You need a requisition whenever someone other than the budget owner wants to spend the budget owner's money. In practice:
- Required: capital items, new suppliers, anything above your lowest approval band, services with a statement of work.
- Often skipped: releases against an approved blanket purchase order (the ceiling was approved once; FAR 13.303-2(d) even says blanket agreements "should be prepared without a purchase requisition"), petty cash, and corporate-card spend within card limits.
- Not needed: a sole owner buying for their own business. The PO and bill are the record.
What goes wrong with requisitions, and how do you fix it?
Most requisition problems come from the process being slower than the alternative.
- Approval bottlenecks. A PR sits in an inbox for 7 days. Fix: a target turnaround per band, a reminder after 24 hours, and an alternate approver when someone is away.
- Split requisitions. One purchase entered as several small PRs to stay under a limit. Fix: report PRs from the same requester to the same supplier within 7 days.
- Retro requisitions. The PR is raised after the invoice arrives. Fix: accounts payable refuses invoices without an approved PO number ("no PO, no pay").
- Vague requests. "Laptop for new hire" with no specification. Fix: required fields and catalogue items for common buys.
- Lost link to the PO. The PR and PO carry different numbers and nobody can trace one to the other. Fix: copy the PR number onto the PO and the goods received note.
How LuckPanda handles purchasing
LuckPanda's Purchasing module keeps vendors, requests for quotation, purchase orders and bills in one record, and approval workflows sit in the Workspace module so a person signs off before anything is issued. You can draft a PO for free from our purchase order format. For the accounts payable side of the same chain, see the invoice approval process.