Requisition or Purchase Order? Getting the Split Right

In a lot of organisations these two documents have merged into one screen, and the distinction survives only in the field names. It is worth pulling them apart, because they answer different questions and they protect against different failures.

What each one is

• Requisition — an internal request. 'I need this; may I?' It is directed at a budget owner and it commits nobody outside the company.

• Purchase order — an external commitment. 'We will buy this at this price.' It creates a contractual obligation and it is directed at a supplier.

The approval belongs on the requisition. The PO is what happens after approval, and it should be issued by someone whose job is issuing POs — not by the person who wanted the goods.

If the requester can also issue the purchase order, nobody has approved anything.

The confirming PO problem

A confirming PO is one raised after the order was already placed, usually because an invoice arrived that would not otherwise match. It is the clearest signal that the process is being bypassed, and it is often the majority of a department's volume without anyone tracking it.

Measure it. Compare the PO creation date with the supplier's order date or the goods receipt date, and report the share of POs raised after the fact. That single percentage tells you how much of your procurement control is real.

Give people a fast lane, or they'll build one

Most bypassing is not defiance; it is someone with a deadline and a process that takes four days. The answer is a legitimate quick path rather than tighter enforcement.

• A low-value threshold with a single approver and no sourcing step.

• A catalogue of pre-negotiated items that skip approval entirely.

• Blanket orders for recurring spend, drawn down without a new requisition each time.

• A named emergency procedure with after-the-fact review, so urgency has an approved route.

Close the loop with receipting

A requisition and a PO with no goods receipt leaves the three-way match with nothing to match against. Receipting is the least popular step and the one that makes the other two worth having, which is why it should sit with operations rather than finance — the people who physically take delivery.

Where to start if it's all broken

Do not begin with a policy rewrite. Begin by measuring three numbers: the share of invoices with no PO, the share of POs raised after the order, and the average time from requisition to PO. The third explains the first two, and fixing it removes most of the incentive to bypass.