Requisition

Definition:

A requisition is a formal document that requests the procurement of goods or services from a company’s stores or external suppliers. It is a formal request to purchase specific items for a particular purpose.

Components of a Requisition:

• Employee’s name: The name of the employee who needs the item.
• Department: The department where the item is needed.
• Item description: A detailed description of the item required, including its name, quantity, specifications, and any other relevant information.
• Purpose: The reason why the item is needed.
• Budget: The budget allocation for the item.
• Lead time: The desired delivery date or time frame.
• Department head’s approval: The approval of the department head or authorized representative.

Process:

1. Initiation: An employee identifies the need for an item and creates a requisition.
2. Review and Approval: The requisition is reviewed by the department head or authorized representative for approval.
3. Purchase Order: If approved, the department creates a purchase order, which formally binds the company to the purchase.
4. Procurement: The purchase order is sent to the supplier, who then procures the item and delivers it to the company.
5. Receipt and Inspection: The item is received and inspected to ensure that it meets the specifications of the requisition.

Example:

A company needs to purchase 100 units of inventory items. An employee creates a requisition specifying the items, quantity, purpose, and budget. The requisition is approved by the department head, and a purchase order is generated. The supplier is notified and the item is procured. Upon receipt and inspection, the items are received into the company’s inventory.

Additional Notes:

• Requisitions are typically used in organizations with formal procurement processes.
• The specific format and content of a requisition may vary depending on the organization.
• Requisitions are often used for items with a higher cost or require a longer lead time.