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There are two key reasons organisations use these documents: The key difference between these two documents is that a purchase requisition is about permission and purchase orders are about purchasing. The purchase requisition process starts with a purchase requisition or purchase request form, a document that is created by the purchaser and submitted to the department that controls finances.

Consider this the part of the purchasing process where you get the thumbs up to purchase the goods and services you want. This serves as the first step in an efficient audit trail for purchasing. Purchase requisitions are often required for goods over a certain dollar threshold. While purchase requisitions can vary depending on business needs, they typically consist of the following information: The clinic would then share this document directly with the purchasing department for approval, rejection, or further discussion.

The purchase order PO is where the buying happens. Again, information may vary, but purchase orders generally include the name of the company purchasing the goods or services, the description and quantity of the goods or services, price, a mailing address, payment information and terms, invoice address, and a purchase order number. Purchase orders are an important document for vendors as well.

Vendors use them for order fulfillment and processing payments. Once the PO is submitted, the vendor raises any concerns. After any issues are dealt with, the order is shipped. The vendor then sends an invoice for the goods or services to be paid by the purchaser.

Businesses handle creating and monitoring purchase requisitions and purchase orders in many ways, but the most efficient is having an electronic procurement system that integrates easily with other financial systems.

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Regardless of the process used, purchase requisitions and purchase orders are a critical part of spend management.