The purchase was agreed on a phone call.
The supplier delivered the same week. The invoice arrived thirty days later. Finance now has a bill that nobody can trace to a written approval.
The storekeeper remembers the instruction. The department head remembers giving permission. Procurement says the supplier was urgent.
But nobody can produce the document showing who authorised the spend, at what price, against which budget, and under which terms.
This is exactly where the confusion around requisition vs purchase order creates real business risk.
A purchase requisition and a purchase order may look similar to people outside procurement, but they do completely different jobs.
A requisition is an internal request.
A purchase order is an external commitment.
If a business mixes them up, the result is usually the same: unclear approvals, supplier invoice disputes, budget gaps, weak VAT records, and month-end reconciliation pressure.
This guide explains requisition vs purchase order in the context of Bangladeshi procurement, finance and accounts teams, with practical examples, format fields, approval flow, and where ERP can control the process.
What Is a Purchase Requisition?
A purchase requisition is an internal request to buy something.
It is raised by the person, department, store, branch or production team that needs the item.
For example:
- A production supervisor needs raw material.
- A storekeeper needs replenishment stock.
- An admin team needs office equipment.
- A branch manager needs outlet supplies.
- A maintenance team needs spare parts.
A purchase requisition normally states:
- What is needed
- Quantity required
- Why it is needed
- Required date
- Estimated cost
- Department or cost centre
- Approval requirement
The most important thing is this:
A purchase requisition does not commit the business to buy anything.
It does not go to the supplier.
It does not confirm price.
It does not create a supplier obligation.
It is only a request for approval.
The request can be approved, rejected, reduced, deferred or sent back for correction before any purchase happens.
That is why the first practical point in requisition vs purchase order is control. The requisition controls the need before the business commits money.
CIPS also describes purchase requisition and purchase order as separate procurement documents with different purposes, where the requisition starts the buying request and the purchase order confirms goods or services to the supplier. CIPS Purchase Requisition cips.org
What Is a Purchase Order?
A purchase order, or PO, is the formal order issued to the supplier after the business approves the need, price and terms.
The purchase order is the document the supplier sees.
It normally includes:
- PO number
- Supplier name
- Supplier address
- Item description
- Quantity
- Unit price
- Total value
- Delivery date
- Delivery location
- Payment terms
- VAT or tax information where applicable
- Reference to the approved requisition
- Authorised signatory
The purchase order tells the supplier:
“We approve this purchase under these terms.”
That is why a PO carries more commercial weight than a requisition.
When finance later asks, “What did we agree to pay?”, the purchase order is the answer.
When accounts matches supplier invoice, delivery record and approval, the purchase order is the reference point.
In the requisition vs purchase order relationship, the requisition asks for permission internally. The purchase order communicates the approved buying instruction externally.
Requisition vs Purchase Order: 7 Critical Differences
The easiest way to understand requisition vs purchase order is to compare what each document actually does.
| Area | Purchase Requisition | Purchase Order |
|---|---|---|
| Purpose | Internal request to buy | Formal order to supplier |
| Raised by | Requesting department, store, branch or user | Procurement or authorised buying team |
| Audience | Internal approvers | Supplier and internal finance team |
| Commitment | Does not commit the business | Commits the business to buy under stated terms |
| Timing | Comes before supplier order | Comes after approval and supplier selection |
| Approval | Department, procurement, finance, management | Authorised signatory after requisition approval |
| Used for | Need approval and budget control | Supplier instruction, delivery and invoice matching |
The core difference is simple:
A requisition asks for approval.
A purchase order confirms the approved purchase.
If a company skips the requisition, it loses control over whether the purchase was needed and approved.
If a company skips the purchase order, it loses the commercial record of what was agreed with the supplier.
Both gaps create problems.
Requisition vs Purchase Order in a Simple Example
Suppose a garment factory in Chattogram needs fabric and trims for next month’s production run.
The production supervisor identifies the requirement.
At this point, the business should not directly call the supplier and place an order.
First, the supervisor raises a purchase requisition.
The requisition includes:
- Fabric type
- Trim details
- Quantity
- Required date
- Estimated cost
- Production reference
- Department
- Budget or cost centre
The production head reviews the need.
Procurement checks existing stock and supplier options.
Finance checks budget.
If the value crosses the company’s approval threshold, the Managing Director or authorised senior person approves it.
Only after approval does procurement issue a purchase order to the selected supplier.
The supplier then delivers against the PO.
The store raises a goods received note.
Accounts matches:
Purchase Requisition → Purchase Order → GRN → Supplier Invoice
This is how the procurement trail stays clean.
Without this chain, finance ends up reconstructing the purchase after the business has already taken delivery.
The Purchase Requisition to Purchase Order Process
A structured procurement flow usually follows this sequence.
1. Need Identified
A department confirms that something is required.
This may be raw material, packaging, spare parts, office supplies, outlet stock, machine parts or service-related materials.
2. Purchase Requisition Raised
The requester fills in the purchase requisition.
This should include item, quantity, purpose, estimated cost and required-by date.
3. Department Head Approval
The department head confirms whether the need is genuine.
This is where many unnecessary purchases should stop.
4. Procurement Review
Procurement checks whether the item is already available, whether the quantity is justified, and whether an existing supplier or better price is available.
5. Finance or Budget Check
Finance checks whether the spend fits the budget or cost centre.
6. Management Approval
If the value crosses a defined threshold, MD, director or senior management approval may be required.
7. Purchase Order Issued
Procurement creates the purchase order and sends it to the supplier.
8. Supplier Delivers
Goods or services are delivered against the PO reference.
9. GRN or Service Confirmation Raised
The store or receiving team records what was actually received.
10. Invoice Matched and Payment Processed
Accounts matches PO, GRN and invoice before payment.
The requisition controls steps 1 to 6.
The purchase order controls steps 7 onward.
That is why requisition vs purchase order is not just a terminology issue. It affects the entire procurement and finance workflow.
What Should a Purchase Requisition Form Include?
A purchase requisition form should capture the information needed to approve the purchase before the company commits money.
A practical format includes:
| Field | Purpose |
|---|---|
| Requisition number | Unique internal reference |
| Date | When the request was raised |
| Department | Where the request came from |
| Requested by | Person raising the need |
| Item description | What is required |
| Specification | Size, grade, model or quality requirement |
| Quantity | How much is required |
| Estimated unit price | Expected price |
| Estimated total cost | Budget impact |
| Required-by date | When the item is needed |
| Purpose | Why the item is needed |
| Budget code / cost centre | Which budget bears the cost |
| Department approval | Confirms need |
| Procurement review | Confirms sourcing logic |
| Finance approval | Confirms budget |
| Management approval | Required above threshold |
Two fields are often missing but very important:
Required-by date and cost centre.
Without required-by date, procurement cannot prioritise.
Without cost centre, finance cannot clearly assign the spend.
For internal stock issue, a separate store requisition format may be more appropriate. See Store Requisition Format.
What Should a Purchase Order Include?
A purchase order should clearly communicate the approved buying instruction to the supplier.
A practical PO should include:
| Field | Purpose |
|---|---|
| PO number | Unique supplier-facing reference |
| PO date | Order date |
| Supplier name | Vendor identity |
| Supplier address | Official supplier address |
| Supplier BIN/VAT information | Where applicable |
| Item description | What is being purchased |
| Quantity | Approved buying quantity |
| Unit price | Agreed price |
| Line total | Item-wise total |
| Delivery date | Expected delivery |
| Delivery location | Where goods should arrive |
| Payment terms | Credit, advance, milestone or other terms |
| Reference requisition number | Connects PO to approval |
| VAT/tax information | For finance and compliance records |
| Authorised signatory | Confirms approval to supplier |
The purchase order should not be treated as a formality.
It is the document that helps accounts check whether the supplier invoice matches what the business approved.
This is where requisition vs purchase order becomes very practical for finance.
A requisition proves the need was approved.
A purchase order proves the supplier was instructed under specific terms.
Why Phone Orders Create Problems
One of the most common procurement problems in Bangladesh is the phone order.
A department urgently needs material.
Someone calls the supplier.
The supplier delivers.
The invoice arrives later.
The purchase may be legitimate, but the paperwork is weak.
The problem is not always dishonesty. The problem is missing sequence.
When a supplier is instructed before a PO exists, accounts later has to ask:
- Who approved the purchase?
- Was the price approved?
- Was the quantity correct?
- Which budget does it belong to?
- Did the goods actually arrive?
- Was the invoice amount agreed?
- Was VAT information handled correctly?
A phone order may feel fast.
But it creates slow reconciliation later.
The better process is simple:
Raise requisition → approve → issue PO → receive goods → match invoice
If urgency requires verbal coordination, the purchase order should still be issued as soon as possible and clearly connected to the approval record.
What Happens When the Requisition Step Gets Skipped?
Businesses often skip the requisition because it feels internal.
But that is exactly why it matters.
Unauthorised Spend Becomes Hard to Trace
A purchase appears in accounts, but nobody can show who requested it or why it was needed.
Budget Control Weakens
Finance cannot clearly connect the purchase to a department, project or cost centre.
Duplicate Purchases Increase
Two departments may order the same item because the first request was never visible.
Quantities Become Inflated
A supplier may deliver what is convenient rather than what the business actually needed.
Audit Questions Become Harder
When the trail does not show requisition, approval, PO, GRN and invoice, accounts has to depend on memory.
That is not a control system.
That is a reconstruction exercise.
What Happens When the Purchase Order Gets Skipped?
Skipping the PO creates a different problem.
The business may have an approved need, but no formal supplier instruction.
That creates risk around:
- Price
- Quantity
- Delivery date
- Payment terms
- Supplier responsibility
- VAT and invoice matching
- Delivery disputes
- Accounts payable control
If the supplier invoice arrives without a PO reference, accounts has to decide whether to pay based on trust, discussion and after-the-fact approval.
That can damage both control and supplier relationship.
In the requisition vs purchase order flow, the requisition protects internal approval. The PO protects supplier commitment.
Both are needed.
Purchase Requisition vs Purchase Order vs Work Order
These three documents are often confused.
| Document | Used For | Supplier Involved? | Main Purpose |
|---|---|---|---|
| Purchase Requisition | Internal buying request | Not yet | Approve the need |
| Purchase Order | Buying goods or materials | Yes | Order from supplier |
| Work Order | Job, repair, installation or service work | Sometimes | Authorise specific work |
A purchase order is for goods or materials.
A work order is for a job or service.
For example:
- Buying two air conditioners = Purchase Order
- Installing those air conditioners = Work Order
If your team handles maintenance, installation or service jobs, read Work Order Format.
Requisition vs Purchase Order in VAT and Accounts
For Bangladeshi businesses, the procurement trail also affects VAT and accounting records.
The purchase requisition itself is not a VAT document.
The purchase order itself is also not a VAT return.
But purchase records, invoices and related documents feed the records that accounts and VAT teams use.
NBR’s VAT and Supplementary Duty Rules include prescribed VAT documentation and forms. For example, VAT-6.3 is the tax invoice, while purchase and sales records are handled through prescribed VAT records such as Mushak 6.1 and 6.2 where applicable. Businesses should confirm current requirements with their VAT team and official NBR guidance. NBR VAT Rules National Board of Revenue
This is why procurement discipline matters.
If purchase records are scattered across phone calls, slips and supplier invoices with weak PO references, the VAT and accounts team has to rebuild the purchase trail later.
A clean requisition-to-PO-to-GRN-to-invoice process makes purchase records easier to trace.
For VAT workflow support, you can explore Prime VAT.
How ERP Controls the Requisition-to-PO Workflow
The reason requisition steps get skipped is usually not policy.
It is friction.
Paper approvals take time.
People chase signatures.
Urgent purchases bypass the process.
ERP can help by making the approval chain faster and more visible.
A structured system can support:
- Requisition raised with item, quantity, cost and purpose.
- Approval routed to the right person.
- Procurement reviews vendor and stock options.
- Finance checks budget.
- Management approves above threshold.
- Approved requisition converts into purchase order.
- PO connects to GRN and invoice.
- Finance reviews the full trail.
CIPS describes procure-to-pay as the process that connects requisition, purchase order and payment lifecycle, with procurement and accounts working through one controlled flow. CIPS Procure-to-Pay Guide cips.org
The key ERP benefit is not just speed.
It is traceability.
A purchase can be traced from original request to approval, PO, goods received and invoice matching.
Where Managerium ERP Fits
Managerium ERP supports procurement, inventory, accounts, finance and approvals in one connected system.
For procurement teams, the value is that the purchase trail does not sit across slips, spreadsheets, phone calls and supplier invoices.
A practical workflow can look like this:
Purchase Requisition → Approval → RFQ → Quotation → Comparative Statement → Purchase Order → Purchase Receive → Supplier Invoice → Payment
In this flow:
- The requisition records the need.
- Approvals follow hierarchy.
- Procurement manages supplier comparison.
- Purchase order confirms supplier terms.
- Purchase receive updates inventory.
- Accounts uses the same reference for payment and reporting.
This keeps the distinction between requisition vs purchase order clear inside the system.
The requisition remains the internal ask.
The purchase order remains the external commitment.
You can explore Managerium ERP for the broader product view.
For a connected procurement-to-outlet workflow, also read Purchase to Outlet ERP.
A Practical Checklist for Bangladeshi Procurement Teams
Before approving or issuing a purchase, check the trail.
| Question | Why It Matters |
|---|---|
| Is there a requisition number? | Creates internal traceability |
| Who requested the purchase? | Shows business need |
| Which department or cost centre owns it? | Supports budget control |
| Was the need approved? | Prevents unauthorised spend |
| Was procurement involved? | Supports supplier and price review |
| Was finance involved where required? | Confirms budget |
| Was a PO issued before delivery? | Creates supplier commitment |
| Does the PO reference the requisition? | Connects request to order |
| Was GRN raised after delivery? | Confirms actual receipt |
| Does invoice match PO and GRN? | Protects payment control |
If any of these are missing, the business is probably depending on memory instead of records.
Common Mistakes in Requisition and PO Process
Using One Form for Everything
A requisition, purchase order and work order should not be merged into one unclear form.
Issuing PO Without Approval
This creates a supplier commitment before the business has approved the need.
Treating Requisition as Supplier Document
A requisition should remain internal. The supplier should receive the PO, not the internal request.
Missing Required-By Date
Without a date, procurement cannot prioritise urgent and non-urgent requests.
No Cost Centre
Without cost centre, finance cannot properly allocate the spend.
Phone Order First, PO Later
This may happen in emergencies, but it should not become normal practice.
Invoice Without PO Reference
This makes accounts payable control much weaker.
No GRN Matching
If goods received are not matched against PO and invoice, payment may be released without confirming actual delivery.
Frequently Asked Questions
What is the difference between requisition vs purchase order?
The main difference between requisition vs purchase order is commitment.
A purchase requisition is an internal request to buy something. It does not commit the business.
A purchase order is the formal order issued to the supplier after approval. It confirms what the business has agreed to buy under stated terms.
Is a purchase requisition the same as a purchase order?
No.
A purchase requisition is raised internally by the department or person that needs the item.
A purchase order is issued externally to the supplier by procurement or an authorised buying team.
The requisition comes first. The PO comes after approval.
Who approves a purchase requisition in a Bangladeshi company?
Usually the department head approves the need first. Procurement reviews sourcing and supplier options. Finance checks budget. Above a defined value threshold, MD, director or senior management approval may be required.
The exact approval chain depends on the organisation.
Can a purchase order be issued without a purchase requisition?
It can happen, but it weakens control.
Without an approved requisition, there is no clear internal record of who requested the purchase, whether the quantity was justified, or whether the budget allowed it.
What is the difference between a purchase order and a work order?
A purchase order is used to buy goods or materials from a supplier.
A work order is used to authorise a specific job or service, such as repair, installation or maintenance.
What documents should accounts match before payment?
Accounts should ideally match:
Purchase Requisition → Purchase Order → GRN → Supplier Invoice
This helps confirm that the need was approved, the order was issued, goods were received and the invoice matches the agreed terms.
How does ERP help with requisition vs purchase order control?
ERP helps by routing requisitions through approval, converting approved requisitions into purchase orders, and keeping the reference between requisition, PO, GRN and invoice intact. This gives procurement, finance and management one traceable purchase trail.
Final Takeaway
The difference between requisition vs purchase order is not just a procurement definition.
It is a control point.
A purchase requisition protects the business before money is committed.
A purchase order protects the business after approval, when the supplier is instructed.
If the requisition is missing, the business cannot prove who approved the need.
If the PO is missing, the business cannot prove what was agreed with the supplier.
For a growing Bangladeshi business, the best procurement process is not the one with the most paperwork.
It is the one where every purchase can be traced clearly:
Need → Requisition → Approval → Purchase Order → Receive → Invoice → Payment
Once that chain is clear, procurement becomes easier to manage, finance gets cleaner records, and month-end stops depending on memory.
