Requisition

In a business context, a requisition refers to a formal request or order made by an individual or department within an organization to obtain goods, services, or resources needed to fulfill specific operational requirements. Requisitions are an essential part of the procurement process and help facilitate the efficient allocation and utilization of resources within an organization. Here are some key aspects and details about requisitions:

• Purpose and Initiation: A requisition serves as a formal document that initiates the procurement process. It is typically created when a department or individual identifies a need for goods, services, or resources to carry out their work. Requisitions can be generated for various purposes, such as purchasing office supplies, acquiring equipment, requesting services from external vendors, or hiring personnel.
• Information and Specifications: A requisition includes detailed information about the requested item or service. This may include the quantity needed, specifications, desired quality standards, delivery or completion deadlines, and any specific requirements or preferences. The requisition should provide sufficient information for the procurement team or relevant department to understand and fulfill the request accurately.
• Authorization and Approval: Requisitions often require authorization and approval from designated individuals or departments within the organization. This helps ensure that the requested items or services align with budgetary constraints, compliance requirements, and internal policies. The approval process may involve different levels of authority depending on the organization's hierarchy and financial thresholds.
• Requisition Workflow: Once a requisition is submitted and approved, it sets in motion a series of activities within the procurement or relevant department. This may involve evaluating potential suppliers or vendors, obtaining price quotes or bids, conducting negotiations, and assessing the feasibility and suitability of the requested item or service. The procurement team coordinates the necessary steps to fulfill the requisition.
• Purchase Orders: In many cases, once a requisition is approved and the procurement process is completed, a purchase order is issued. A purchase order is a legally binding document that formalizes the agreement between the organization and the supplier or vendor. It outlines the specific terms and conditions, including the agreed-upon price, quantity, delivery or completion dates, and other relevant details.
• Tracking and Documentation: Requisitions are typically tracked and recorded for documentation and record-keeping purposes. This helps maintain transparency, accountability, and auditability within the procurement process. Organizations may use electronic systems, such as procurement software or enterprise resource planning (ERP) systems, to manage and track requisitions throughout their lifecycle.
• Requisition Management: Effective requisition management involves streamlining and optimizing the process to ensure timely and cost-effective procurement. This may include establishing standardized requisition templates, implementing approval workflows, leveraging technology for automation, and monitoring key performance indicators (KPIs) to track requisition cycle time, compliance, and supplier performance.
• Requisition Control and Budgeting: Requisitions play a crucial role in controlling spending and managing budgets within an organization. They help track resource needs and associated costs, enabling better budget planning and allocation. By centralizing and monitoring requisitions, organizations can ensure that expenditures are authorized, aligned with strategic objectives, and within approved budgets.
• Requisition Audit and Compliance: Requisitions are subject to audits and compliance reviews to ensure adherence to internal policies, financial regulations, and legal requirements. Audits may focus on aspects such as proper authorization, competitive bidding processes, supplier selection, and contract management.

Overall, requisitions provide a structured and formalized mechanism for requesting and obtaining the necessary resources to support an organization's operations. By following a requisition process, organizations can improve efficiency, maintain financial control, and ensure compliance while fulfilling their operational needs.