6 Difference Between Purchase Requisition and Purchase Order

Purchase requisition and purchase order are used in manufacturing firms. In manufacturing firms, import and export of the material occur at frequent intervals. Both of these terms purchase requisition and purchase order (PO) is used to fulfill the requirements of the needed material. A purchase requisition is used to get approval for the material from different departments.

When the purchase requisition is approved. A purchase requisition is approved by the purchasing department. After the approval of the purchase requisition, a purchase order is prepared by the purchasing department. After that this purchase order is awarded to the party that fulfilled the requirements of the purchasing party

Requisition vs purchase order

Some basic comparisons between purchase requisition and purchase order

Sr.no	Purchase Requisition	Purchase Order
1	A purchase requisition is just a formal way or request to be aware of the material requirements.	A purchase order is a properly written document to provide the specified material. It contains complete detail and a description of the material required.
2	A purchase requisition is an internal document. Which is used by the lower department to be an aware higher department of the material requirements.	A purchase order is an external document that is used between two different parties. This one-party awards an order to another party to supply required materials.
3	A purchase requisition is prepared by the authorized person of a lower department.	Purchase Order is prepared by the higher authorities of the organization.
4	In purchase requisition, only two copies are made one for the purchasing department and the other for oneself to make a record.	Five copies are used for purchase orders which are given as the original copy to the supplier and other duplicate copies are held by the other departments like cost accounting, receiving department, and the department which requires material, and the fourth one to the purchasing department.
5	The purchase manager receives the purchase requisition.	A purchase order is received by the vender.
6	It is just a normal form.	It becomes a legal bond between vendor and customer.

Purchase Requisition

It is a form that is used internally by any organization. This form is prepared by the authorized person who needs material from other vendors. A purchase requisition is mostly prepared by the storekeeper when they need new material or shortage of the existing materials.

Purchase requisition contains all details like department name, vendor name, material description, the quantity of the material, and expected price of the material. In other words, it is like a list in which we fill the material requirements.

After the completion of the requisition, it is sent to the purchasing department. It is the duty of the purchasing department to accept or decline the requisition. If they accept next steps are taken in the purchase process.

Who makes the requisition?

1. Storekeepers
2. Production planning department
3. Production department
4. Plant engineer
5. Purchase control department
6. Department head

What is the purpose of the purchase requisition?

1. The first step is to start the purchase process.
2. Written document or evidence for the material purchase.
3. It contains reference dates.

What is a purchase order (PO)

Generally purchase order is an external document that is used to purchase material from another party. But sometimes it is also used among an organization like one department wants to purchase from the other departments in that cast sometimes purchase order is also used for this purpose.

A purchase order is the next step after the requisition is accepted by the purchasing department. After the acceptance of the purchase requisition, it is the duty of the purchasing department to make a purchase order and selection of a vendor. A particular vendor is selected on the basis of material requirements and the vendor’s capabilities to complete the order.

Material price is also considered when the vendor is selected. After that purchase order is shared with the vendor. A purchase order contains the complete detail of the material like material description, quantity, and the price is clearly mentioned.

When a tender is accepted by the vendor or supplier an automatic bond is signed between vendor and purchaser. The purchase order authorized the vendor to deliver goods and send bills to the purchaser.

Every purchase order has a unit serial no. Same as a purchase requisition. This number helps to control the issue of the purchase. Purchase order requires to follow up the checking the delivery status of the order

For a batter purchase quotation should be used before placing an order. Because in many cases price disputes arise which affects the business. Everything should be clear on email or phone before placing the order.

After the acceptance of the purchase order, it becomes a legal contract that is followed by civil laws. So purchase orders should be prepared with very care.

Purpose of purchase order

1. It is like evidence of contact between vendor and purchaser.
2. It allows vendors to supply material.
3. It contains clear descriptions and instructions which protect from disputes
4. Used as a record.

 Difference between purchase requisition and purchase order

1. A purchase requisition is just a formal way or request to be aware of the material requirements. Mostly storekeepers prepare the purchase requisition according to the stock of the material in the store. On the other hand purchase, the order is a properly written document to provide the specified material. It contains complete detail and a description of the material required.
2. A purchase requisition is an internal document. Which is used by the lower departments to the awareness of the higher department of the material requirements. While purchase order is an external document that is used between two different parties. This one-party awards an order to the other party to supply required materials.
3. A purchase requisition is prepared by the authorized person of a lower department. While PO is prepared by the higher authorities of the organization.
4. There are five copies used for purchase orders which are given to the original copy to the supplier and other duplicate copies are held by the other departments like cost accounting, receiving department, and the department which requires material, and the fourth one to the purchasing department. While purchase requisition only two copies are made one for the purchasing department and the other for oneself to make a record.
5. The purchase manager receives the purchase requisition and the purchase order is received by the vender.
6. A purchase requisition is just an internal and normal form. A purchase order becomes a legal document between vendor and customer.

Conclusion

Purchase requisition and purchase order both are used to purchase the material. While purchase requisition is the initial step in the purchase while purchase order is the final step to buying the material. Both have their own importance.

This is all about the purchase requisition and purchase order. We hope you understand the concept very well. To read more interesting differenceebetween please visit our website.