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Uncovering Procurement Excellence

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Difference between Purchase Requisition and Purchase Order

difference between purchase requisition and purchase order
blog dateJun 17, 2022 | 6 min read | views 1229

Purchase requisition and purchase order are simply interdepartmental forms which serve the purpose of handling the accounting and finances better. They bring in transparency along with setting of a defined process flow.

Let’s have a quick look about where these forms are placed with respect to the process flow:

process flow chart

Understanding The Basics Purchase Requisition and Purchase Order 

As seen in the above figure that once the purchase order is received it goes through approval process and based on the approval the purchase requisition is converted into purchase order.

Procurement management process involves purchase requisition and purchase order. Now that we know how PR and PO are important in the workflow, let’s understand few basic terms :

1. What is a purchase requisition?

In simple terms, purchase requisition is an internal document used by an employee to purchase goods or services on behalf of their firm. It is the formal intimation to let the purchase department know to start the purchasing process. It also serves as a ready reckoner to the finance department to co ordinate and verify basis this document.  

2. Who sends the purchase requisition?

It is first filled out by an employee who sees the need for that product or service.

3. What are the details in purchase requisition form?

An employee fills details like item name, description of goods, quantity, price, suggested vendor, etc

Here’s an example of a purchase requisition form:

purchase requisition

4. Who receives the purchase requisition?

Once PR is raised, it is received either by department head or the purchase department.

5. What comes first: the PR or PO?

Purchase requisition comes first, a purchase order is issued by the buyer who makes sure they got exactly what they had ordered.

Now let’s quickly understand more about a PO:

1. What is a purchase order?

It is a document issued by a business purchasing department while placing an order with its supplier or vendor. It is a legally binding document which contains information such as price and agreed terms with the vendor or seller. If digitalized, it also provides excellent tracking function for any organization.

2. Who sends PO and what are the details contained in it?

A PO is issued by the purchase department and it contains details like purchase order date, product level, ship location, select vendor, bill location name, send mail to vendor, etc.

Here’s an example of a PO form:

purchase requisition

3.Who receives the PO?

PO is received by the seller who then decides whether to fulfill the order or not. If he decides to fulfill the order, the purchaser sends payments at agreed price or at a later date as mentioned in the PO.

4. Who makes the payment against purchase order?

The purchaser makes the payment against the PO. Once the vendor delivers order along with an invoice, the purchasers finance department compares their invoice to the PO and makes sure that these two documents match with each other.

5. How can the process of  purchase requisition or purchase order be automated?

With TYASuite the entire process of purchase order management can be automated and these documents can be prepared in a jiffy.

With TYASuite supercharge your purchase workflows & streamline your purchase approvals from days to hours.

TYASuite Feature Purchase Requisition Purchase Order 
Smart creation With TYASuite you can create bulk PR through excel imports. It also has feature to automatically create PR`s   Automatic PO raising along with pre fixed vendor pricing are some of the core features of TYASuite.  
Stress-free approvals TYASuite cuts down your manual work with multiple PR approvals across various departments. It also has a feature to auto archive PRpost approval.   With flawless PO tracking and easy approvals through emails, makes TYASuite the number one choice for any business. Inbuilt GST eliminates the manual dependency leading to an efficient purchase department.
Reliable partner

Serves as a reliable partner by working closely through pre-defined budgets set in TYASuite. TYASuite enables a business to have total control over each cost center as well as over your purchase requisition process. 

Helps in end to end vendor management and saves loads of time. TYASuite makes complex functions as easy as the click of a mouse. 
Budgeting and forecasting TYASuite has inbuilt features to customize your requisitions based on the allocated funds. Purchase requisition budgets can be set at a department level. It also helps in forecasting based on the buying patterns.    Take highly informed business decisions with TYASuite as it helps in smart purchase through its interactive reports. Based on the purchase behavior our software empowers you to select the best vendor and even identifies the buying cycles, choosing the best what the market offers during that time.
Steadfast alerts and notifications For every purchase requisition raised the approver gets an alert to approve the PR. The employee does not have to worry about giving any reminders about the PR to the approver.  With TYASuite you can customize the alerts and notifications that you wish to inform to, based on the user profile and access.    
Highly customized and flexible TYASuite is highly customized and built to suit your business needs. With features like transparent audits, vendor onboarding & management, easy accounting, all this leads to making purchasing requisition an easy task to manage. With tools like enhancing the buying efficiency through smart tracking, budget allocations, 3 way match and transparent reporting TYASuite has redefined the way PO`s are raised and approved.

 

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