Requisition to Purchase Order
Complete flow from internal purchase request through approval to Purchase Order creation.
Flow Diagram
REQUISITION TO PO FLOW
═══════════════════════════════════════════════════════════════════════════════
┌─────────────────┐ ┌─────────────────┐ ┌─────────────────┐
│ REQUISITION │ │ APPROVAL │ │ PURCHASE ORDER │
│ │ │ WORKFLOW │ │ │
│ GL: None │ ──▶ │ GL: None │ ──▶ │ GL: None │
│ Inv: None │ │ Inv: None │ │ Inv: On Order │
└─────────────────┘ └─────────────────┘ └─────────────────┘
│ │ │
│ │ │
▼ ▼ ▼
Created by Approved by Sent to vendor
requester supervisor(s) (procurement)
│
▼
┌─────────────────────────────────┐
│ STANDARD PURCHASE PATH │
│ Item Receipt → Bill → Payment │
└─────────────────────────────────┘
When to Use Requisitions
| Scenario | Benefit |
|---|---|
| Budget control | Requires approval before purchasing |
| Decentralized requests | Non-procurement staff can request items |
| Compliance | Audit trail of who requested what |
| Consolidated purchasing | Combine multiple requests into one PO |
| Preferred vendor enforcement | Procurement selects vendor |
Stage 1: Create Purchase Requisition
What Happens
| Action | Result |
|---|---|
| Employee creates requisition | Request record saved |
| Add items/services needed | Line items with quantities |
| Specify preferred vendor (optional) | Suggested vendor captured |
| Add justification | Business reason documented |
| Submit for approval | Enters approval workflow |
Creating a Requisition
Navigation: Transactions > Purchases > Enter Requisitions
Key Fields
| Field | Description |
|---|---|
| Requester | Employee making the request |
| Department | Cost allocation |
| Due Date | When items needed |
| Items | What to purchase |
| Estimated Amount | Budgetary reference |
| Memo | Justification/reason |
Requisition Example
PURCHASE REQUISITION #REQ-001
═══════════════════════════════════════════════════════════════════════════════
Requester: John Smith (Sales Department)
Request Date: 2024-01-15
Needed By: 2024-02-01
Status: Pending Supervisor Approval
┌─────────────────────────────────────────────────────────────────────────────┐
│ LINE ITEMS │
├────────┬────────────────────────────┬─────────┬────────────┬───────────────┤
│ Line │ Item │ Qty │ Est. Cost │ Vendor (Pref) │
├────────┼────────────────────────────┼─────────┼────────────┼───────────────┤
│ 1 │ Laptop Computer │ 5 │ $1,200 ea │ Dell Inc. │
│ 2 │ External Monitor 27" │ 5 │ $350 ea │ Dell Inc. │
│ 3 │ Wireless Keyboard/Mouse │ 5 │ $80 ea │ - │
├────────┴────────────────────────────┴─────────┴────────────┴───────────────┤
│ TOTAL ESTIMATED │ $8,150 │
└──────────────────────────────────────────────┴─────────────────────────────┘
Memo: New equipment for 5 new sales representatives starting Feb 1.
Approved in 2024 IT budget allocation.
GL Impact
None - Requisitions do not post to General Ledger.
Inventory Impact
None - Requisitions do not affect inventory quantities.
Stage 2: Approval Workflow
Approval Hierarchy
REQUISITION APPROVAL WORKFLOW
═══════════════════════════════════════════════════════════════════════════════
┌─────────────────────┐
│ Requisition │
│ Created │
│ Status: Pending │
└──────────┬──────────┘
│
▼
┌─────────────────────┐
│ Submit for │
│ Approval │
└──────────┬──────────┘
│
┌────────────────┼────────────────┐
│ │ │
▼ ▼ ▼
┌─────────────┐ ┌─────────────┐ ┌─────────────┐
│ < $1,000 │ │ $1K - $10K │ │ > $10K │
│ │ │ │ │ │
│ Supervisor │ │ Department │ │ VP/Director │
│ Only │ │ Manager │ │ + Finance │
└──────┬──────┘ └──────┬──────┘ └──────┬──────┘
│ │ │
└────────────────┼────────────────┘
│
┌─────────┴─────────┐
│ │
▼ ▼
┌─────────────┐ ┌─────────────┐
│ APPROVED │ │ REJECTED │
│ │ │ │
│ Ready for │ │ Returned │
│ PO Creation │ │ to Requester│
└─────────────┘ └─────────────┘
Approval Statuses
| Status | Meaning | Next Action |
|---|---|---|
| Pending Submission | Draft, not submitted | Submit for approval |
| Pending Supervisor Approval | Awaiting first approval | Supervisor reviews |
| Pending Second Approval | Needs additional approval | Manager/VP reviews |
| Approved | Ready for PO | Procurement creates PO |
| Rejected | Denied | Revise or cancel |
| Partially Approved | Multi-level pending | Continue approval chain |
Configuring Approval Routing
Setup: Customization > Workflow > Workflows
Common approval rules:
- Amount thresholds
- Department-specific approvers
- Item category approvers
- Budget availability check
Stage 3: Convert to Purchase Order
Conversion Options
| Method | Description | Best For |
|---|---|---|
| Single Requisition → Single PO | One-to-one conversion | Simple requests |
| Multiple Requisitions → Single PO | Consolidate requests | Same vendor |
| Single Requisition → Multiple POs | Split by vendor | Multi-vendor items |
| Blanket PO | Standing order | Recurring purchases |
Converting Single Requisition
Navigation: From Requisition record > Actions > Create Purchase Order
SINGLE REQUISITION CONVERSION
═══════════════════════════════════════════════════════════════════════════════
Requisition #REQ-001 (Approved)
│
│ Actions > Create Purchase Order
│
▼
┌─────────────────────────────────────────────────────────────────────────────┐
│ NEW PURCHASE ORDER │
│ │
│ Created From: REQ-001 │
│ Vendor: Dell Inc. │
│ │
│ Lines copied from requisition: │
│ ├── Line 1: Laptop Computer (5) @ $1,200 │
│ ├── Line 2: External Monitor 27" (5) @ $350 │
│ └── Line 3: Wireless Keyboard/Mouse (5) @ $80 │
│ │
│ Total: $8,150 │
└─────────────────────────────────────────────────────────────────────────────┘
Converting Multiple Requisitions
Navigation: Transactions > Purchases > Create PO from Requisitions
CONSOLIDATING MULTIPLE REQUISITIONS
═══════════════════════════════════════════════════════════════════════════════
Approved Requisitions for Vendor: Office Supplies Inc.
┌─────────────────────────────────────────────────────────────────────────────┐
│ ☑ REQ-001 John Smith Sales Paper, Pens $250 │
│ ☑ REQ-002 Jane Doe Marketing Notebooks, Folders $180 │
│ ☑ REQ-003 Bob Wilson HR Binders, Labels $120 │
│ ☐ REQ-004 Alice Chen IT Printer Ink $450 (different) │
└─────────────────────────────────────────────────────────────────────────────┘
│
│ Create PO (Selected)
▼
┌─────────────────────────────────────────────────────────────────────────────┐
│ PURCHASE ORDER #PO-001 │
│ │
│ Vendor: Office Supplies Inc. │
│ Created From: REQ-001, REQ-002, REQ-003 │
│ │
│ Combined Lines: │
│ ├── Paper (from REQ-001) │
│ ├── Pens (from REQ-001) │
│ ├── Notebooks (from REQ-002) │
│ ├── Folders (from REQ-002) │
│ ├── Binders (from REQ-003) │
│ └── Labels (from REQ-003) │
│ │
│ Total: $550 │
└─────────────────────────────────────────────────────────────────────────────┘
Splitting to Multiple POs
SPLITTING REQUISITION TO MULTIPLE POS
═══════════════════════════════════════════════════════════════════════════════
Requisition #REQ-005 (Multiple Vendors)
│
├── Line 1: Dell Laptop → Vendor: Dell Inc.
├── Line 2: HP Printer → Vendor: HP Inc.
└── Line 3: Cisco Router → Vendor: Cisco Systems
│
│ Create PO (splits by vendor)
▼
┌──────────────────┬──────────────────┬──────────────────┐
│ PO-001 │ PO-002 │ PO-003 │
│ Vendor: Dell │ Vendor: HP │ Vendor: Cisco │
│ Laptop (1) │ Printer (1) │ Router (1) │
└──────────────────┴──────────────────┴──────────────────┘
All linked back to REQ-005
Record Relationships
REQUISITION TO PO RECORD LINKS
═══════════════════════════════════════════════════════════════════════════════
Requisition #REQ-001
│
├── Status: Approved
│
├── Approval History:
│ ├── Submitted: 2024-01-15 by John Smith
│ ├── Approved: 2024-01-16 by Manager Mary
│ └── Approved: 2024-01-17 by VP Tom (>$5K)
│
└── Related Transactions:
│
└── Purchase Order #PO-001
│
├── createdfrom: REQ-001
│
├── Item Receipt #IR-001
│ └── createdfrom: PO-001
│
├── Vendor Bill #VB-001
│ └── createdfrom: PO-001
│
└── Vendor Payment #PYMT-001
└── apply: VB-001
VIEW REQUISITION FROM ANY DOWNSTREAM RECORD:
PO → Related Records → Requisition
Bill → PO → Related Records → Requisition
Complete Timeline
REQUISITION TO PAYMENT TIMELINE
═══════════════════════════════════════════════════════════════════════════════
Day 1: Requisition Created
└── GL: None
Inv: None
Status: Pending Approval
Day 2: Requisition Approved
└── GL: None
Inv: None
Status: Approved
Day 3: Purchase Order Created (from REQ)
└── GL: None
Inv: On Order qty updated
Status: Pending Receipt
Day 7: Item Receipt Saved
└── GL: Inventory + IRNB posted
Inv: On Hand increased
Day 12: Vendor Bill Created
└── GL: IRNB cleared, A/P posted
Inv: No change
Day 40: Vendor Payment Made
└── GL: A/P + Cash posted
Inv: No change
Requisition vs Direct PO
| Feature | Requisition Flow | Direct PO |
|---|---|---|
| Approval required | Yes (configurable) | Optional |
| Requester can create | Yes | Usually procurement only |
| Vendor selection | Procurement decides | Creator decides |
| Budget check | Before approval | At PO creation |
| Audit trail | Full request history | From PO only |
| Consolidation | Multiple REQs → 1 PO | Manual |
Best Practices
Do's
| Practice | Benefit |
|---|---|
| Set approval thresholds | Budget control |
| Require justification | Audit compliance |
| Use preferred vendors | Negotiated pricing |
| Review before converting | Consolidate when possible |
| Track requisition aging | Timely processing |
Don'ts
| Avoid | Consequence |
|---|---|
| Skipping approval for urgent needs | Audit issues |
| Too many approval levels | Slow processing |
| Not training requesters | Incomplete requests |
| Manual PO creation (when REQ exists) | Lost audit trail |
Reports
Useful Requisition Reports
| Report | Purpose |
|---|---|
| Requisitions Pending Approval | Approver workload |
| Requisition Aging | Processing delays |
| Requisition to PO Conversion | Fulfillment tracking |
| Requisitions by Department | Spending patterns |
| Rejected Requisitions | Policy compliance |
Next Steps
- Standard Path - After PO is created
- Direct Paths - When requisition not needed
- Returns to Vendor - Handle vendor returns