Departments in some small businesses need to order supplies through the financial arm of the business rather than buying the supplies on their own. This process includes the use of both requisition orders and purchase orders, which represent different steps of the same purchasing process.

Requisition Order
A requisition order is a form that a department must submit to whichever department controls the financial activities of the business. Although individual forms vary by business, requisition orders generally require certain information, including the department requesting materials, the exact number of supplies requested, a general description of those supplies, the legal name of the supplier and the expected price of the purchase. A requisition order is either approved or denied by the financial department of the business.

When are Requisitions Required?
For small purchase orders, it often is standard procedure for departments to buy materials directly from retailers using a company credit card and skip the process of requisition and purchase orders altogether. Usually, businesses and organizations require a requisition order when a proposed purchase exceeds a certain monetary value. For example, Tufts University requires a requisition order for most purchases in excess of $2,000. Other businesses require requisition orders for much smaller purchases.

Types of Requisitions
Requisition orders most often are submitted so a department may get approval to purchase needed materials from an entity operating outside of the business. However, sometimes one department of a business wishes to purchase equipment or materials from another department; in such cases, many businesses require that the purchasing department submit an interdepartmental requisition order. Interdepartmental requisition orders can be helpful to the financial or accounting office in large businesses where departments have separate operating budgets.

Purchase Orders
Once the financial office of a business has approved the requisition order submitted by a department, it issues a purchase order to the supplier of the requested goods. Purchase orders should include certain information, such as the name of the purchasing office, supplies being purchased, ship-to address, payment terms, invoicing instructions and purchase order number. To assist in record keeping, purchase orders will have the same number as the requisition order that generated them.

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