What is a purchase requisition and how does it connect to invoice compliance?
A purchase requisition is an internal request to the procurement department to purchase specified goods or services. It is the first step in the formal procurement cycle and must be approved before a purchase order is raised. Requiring purchase requisitions for all significant expenditure ensures that spending is authorized, budgeted, and directed through the procurement process. Invoices received for purchases where no purchase requisition was raised indicate maverick spend.
What is the requisition-to-pay process?
The requisition-to-pay (or purchase-to-pay) process: (1) Requisition: Department raises purchase requisition with specification and estimated cost; (2) Approval: Budget holder and procurement approve requisition; (3) PO creation: Procurement issues purchase order to supplier with price and terms agreed; (4) Delivery: Goods or services delivered; GRN or service confirmation raised; (5) Invoice receipt: Supplier invoice received; (6) Matching: Invoice matched against PO and GRN/service confirmation; (7) Payment: Matched invoice approved and paid in payment run.
Frequently Asked Questions
- Can procurement teams bypass purchase requisitions for urgent purchases?
- Most organizations define an emergency procurement process for genuine urgencies: a verbal or informal approval followed by a retrospective requisition and purchase order created after the fact. The retrospective PO must be created within a defined timeframe (typically 5 days). High rates of retrospective POs indicate that the emergency process is being misused as a workaround to the normal process. Tracking retrospective PO rates and investigating the causes helps procurement improve policy compliance.
- How does digital procurement improve requisition compliance?
- Digital procurement platforms (SAP Ariba, Oracle Procurement Cloud, Coupa, Jaggaer) automate the requisition process with online forms, digital approval workflows, budget checking, preferred supplier catalogs, and mobile approvals. These tools increase requisition compliance by making the compliant path easier than workarounds. Real-time budget visibility prevents approvers from approving requisitions that would exceed budget. Supplier catalogs with pre-negotiated prices eliminate the need for procurement to negotiate each purchase individually.