FAQ: What's the difference between a Requisition and a Purchase Order?

Within a typical procurement workflow, Purchase Requisitions and Purchase Orders represent distinct stages with different purposes:

Purchase Requisition (Req):

• Purpose: An internal request document used by an employee or department to ask permission to purchase goods or services. It signifies a need but not yet an official order.
• Audience: Internal (Submitter, Approver, Procurement Team).
• Lifecycle:
  1. Created by someone needing goods/services.
  2. Submitted for internal approval (often based on value, department, budget).
  3. If approved, it serves as authorisation for the Procurement team (or authorised user) to create an official Purchase Order.
  4. If rejected, the purchase request is denied.
• Key Data: What is needed, quantity, estimated price, justification, required date, suggested supplier (optional).
• Zudello Module: Purchasing > Requisitions

Purchase Order (PO):

• Purpose: An external, legally binding document sent to a specific supplier to formally order goods or services at an agreed-upon price and terms. It represents a commitment to buy.
• Audience: External (Supplier) and Internal (AP, Receiving, Requestor).
• Lifecycle:
  1. Created based on an approved Requisition OR created directly (if allowed).
  2. May require further approval depending on value or policy.
  3. Once approved (status Pending), it can be sent to the supplier (Place Order action, status Placed).
  4. Used as the basis for receiving goods (Goods Receipt) and matching supplier invoices (Invoice Matching).
  5. Eventually closed or completed when fully received and invoiced.
• Key Data: Specific supplier, item codes/descriptions, agreed quantities and prices, delivery address, payment terms, PO number.
• Zudello Module: Purchasing > Orders

In Summary:

Feature	Purchase Requisition (Req)	Purchase Order (PO)
Nature	Internal Request	External Order / Contract
Purpose	Ask permission to buy	Commit to buy
Audience	Internal	External (Supplier) & Internal
Binding?	No	Yes (Legally binding once accepted)
Next Step	Approval -> PO Creation	Approval -> Send to Supplier -> Receive
Zudello Sub	Requisitions	Orders

Using requisitions adds an extra layer of internal control before a financial commitment is made to an external supplier via a PO.