Requisition definition
/What is a Requisition?
A requisition is a written request made by an employee for an organization's purchasing department to buy goods or services. This request specifies the exact item and quantity to be obtained, so that the purchasing staff can more efficiently source what is needed. A requisition form may be signed by the department manager whose department will be charged for the purchase; doing so gives the manager approval authority over every purchase. The use of a requisition can be time-consuming, so many organizations use procurement cards to sidestep the process for less-expensive purchases.
How a Requisition Works
The employee needing to acquire something initially fills out a requisition form and then takes it to his or her manager for approval. If approved, the requisition is then forwarded to the purchasing department, which acquires the items indicated on the form.
Advantages of a Requisition
There are several advantages to using requisitions in the purchasing process. First, they establish accountability, since someone has to sign off on each one and accept the charges associated with it. Because of this, requisitions tend to reduce the amount of costs incurred by a business. Also, because they clearly state who will be charged for a purchase, there is no way to obfuscate a purchase, which tends to reduce the amount of purchasing fraud that occurs.
Disadvantages of a Requisition
While requisitions can streamline processes and maintain control over spending, there are some disadvantages associated with using them, which are as follows:
Time-consuming process. Requisitions often require multiple layers of approval, which can slow down the procurement process, particularly in large organizations. Also, filling out requisition forms and managing documentation can be tedious, especially for minor or routine purchases.
Inflexibility. Requisitions may follow rigid procedures that limit flexibility. This can hinder the ability to respond quickly to urgent needs or unique situations.
Increased costs. Maintaining requisition systems, whether manual or electronic, involves costs related to software, training, and administrative oversight.
Complexity and errors. In systems with manual requisitions, there’s a higher risk of errors in documentation, such as incorrect quantities, account codes, or item descriptions.
Training requirements. Employees may need training to correctly use the requisition system, especially if it’s software-based, adding to complexity.
Employee frustration. Lengthy or complex requisition processes may frustrate employees and discourage adherence to protocols.
Employee disempowerment. Strict requisition procedures can limit individual employees’ ability to make decisions or exercise judgment, leading to a lack of autonomy.
Approval loopholes. Poorly designed requisition systems might allow unauthorized or inappropriate requests to be approved.
By addressing these disadvantages through process optimization, better training, and leveraging modern technology, organizations can mitigate many of these issues while still benefiting from the control and accountability that requisition systems provide.