Purchase Requisition vs Purchase Order: Key Differences

Quick answer: In the purchase requisition vs purchase order comparison, the requisition is an internal request from an employee asking permission to buy, approved by a budget holder. The purchase order is an external document that purchasing sends to a supplier, stating items, prices and terms. A requisition creates no supplier commitment; an accepted PO usually does.

Purchase requisitions and purchase orders sound alike and often share a form layout, so people mix them up. The difference matters because they sit on opposite sides of a key control point. The requisition is where a business decides whether it should spend money. The purchase order is where it commits that money to a specific supplier. Understanding the purchase requisition vs purchase order split helps buyers keep spending under control and helps suppliers understand why they need a PO number before they invoice.

This guide compares the two documents side by side, shows how they fit into the procure-to-pay process, works through an example with real numbers and lists the mistakes that cause unauthorized spending or unpaid invoices.

Purchase requisition vs purchase order at a glance

Feature	Purchase requisition	Purchase order
Purpose	Ask for approval to buy	Place an order with a supplier
Audience	Internal only	External: sent to the supplier
Created by	Requester (the employee or department with the need)	Purchasing, procurement or an authorized buyer
Approved by	Budget owner or manager	Buyer within their authority; sometimes finance for large POs
Supplier named?	Optional; may suggest one	Always
Prices	Estimates	Agreed or quoted prices
Legal effect	None outside the business	Offer to buy; usually binding once accepted
Accounting effect	Often none; may reserve budget	Creates a commitment (encumbrance) in many systems
Used in invoice matching?	No	Yes, in two-way and three-way matching
Typical number format	PR-2026-0145	PO-2026-0312

What is a purchase requisition?

A purchase requisition (PR) is a request, usually on a form or in procurement software, that says: "My team needs this, here is roughly what it will cost, and here is the budget it should come from." It typically includes:

• Requester name, department and date.
• Description of the items or services and quantities needed.
• Estimated unit cost and total.
• Cost center, project or general ledger account.
• Date needed by and delivery location.
• Suggested supplier or attached quotes, if any.
• Business justification.

The requisition goes to an approver who checks two things: is this a sensible use of money, and is there budget for it? If yes, it moves to purchasing. If no, it stops there and nothing has been committed. That is the whole point: the requisition is a cheap place to say no.

What is a purchase order?

A purchase order (PO) is the buyer's formal offer to a supplier. It names the supplier and lists exactly what is being bought, at what price, under what terms. A typical PO includes:

• PO number and date.
• Buyer's legal entity name, billing address and delivery address.
• Supplier name and address.
• Line items with descriptions, quantities, units and unit prices.
• Taxes, shipping and total.
• Delivery date and shipping terms.
• Payment terms and invoicing instructions, including "quote this PO number on your invoice".
• Reference to the buyer's standard terms and conditions.

When the supplier accepts the PO, in writing or by delivering, a contract is generally formed on those terms, though the exact rules depend on the contract law that applies. In the US, for example, UCC section 2-206 covers how an order can be accepted by a promise to ship or by prompt shipment. If you need a starting layout, our purchase order template guide walks through each field.

Where each document sits in procure-to-pay

Procure-to-pay is the full cycle from noticing a need to paying the supplier. The two documents appear at different points:

1. Need identified. An employee realizes the team needs something.
2. Purchase requisition raised and approved by the budget owner.
3. Sourcing. Purchasing gets quotes, picks a supplier and negotiates terms. Some businesses send a request for quotation at this point.
4. Purchase order issued to the chosen supplier.
5. Supplier accepts and delivers the goods or performs the service.
6. Goods receipt recorded by the person who received the delivery.
7. Supplier invoice received, quoting the PO number.
8. Matching and approval. AP compares invoice, PO and receipt; see our three-way match guide.
9. Payment on the due date.

The requisition controls whether to buy. The PO controls what is bought and from whom. The match controls whether the bill is right. Our comparison of an invoice vs purchase order covers the last two steps in more depth, and the invoice approval workflow guide explains how approvals continue after the invoice arrives.

Worked example: from requisition to invoice

A marketing team of a 40-person company needs 20 new laptops.

Step 1: Purchase requisition

The marketing lead raises requisition PR-2026-0145: 20 laptops at an estimated $1,200 each, cost center Marketing.

• Estimated total: 20 × $1,200 = $24,000.
• The approval matrix says requisitions between $10,000 and $50,000 need the department head and the finance director. Both approve.
• The finance system reserves $24,000 of the marketing equipment budget.

Step 2: Purchase order

Purchasing collects three quotes and chooses the lowest compliant one at $1,150 per laptop, plus $150 shipping. The supplier charges 8% sales tax on the laptops but not on shipping (shipping taxability varies by state; this is an illustration).

• Laptops: 20 × $1,150 = $23,000.
• Sales tax: $23,000 × 8% = $1,840.
• Shipping: $150.
• PO-2026-0312 total: $23,000 + $1,840 + $150 = $24,990.

The PO total is $990 above the requisition estimate because the estimate left out tax and shipping. The company's policy allows a PO to exceed its requisition by up to 5% without re-approval: $24,000 × 5% = $1,200. Since $990 is less than $1,200, the PO goes out. Had the estimate been badly wrong, the requisition would have gone back for approval. You can check tax figures like this with the sales tax calculator.

Step 3: Delivery and invoice

The supplier delivers 18 laptops; two are back-ordered. The receiving clerk records a goods receipt for 18. The supplier invoices for 18: 18 × $1,150 = $20,700, plus tax of $1,656 and the full $150 shipping, total $22,506. AP matches the invoice against the PO and the receipt for 18 units, approves it, and leaves 2 units open on the PO for a later invoice.

Notice that the requisition never appears in the match. Its job ended once the PO was issued; it remains as audit evidence that the spending was approved.

How requisitions and POs affect budgets

Many finance systems track spending at three points, and the two documents drive the first two:

• Pre-commitment: an approved requisition can reserve budget so two managers do not spend the same money twice. Nothing is owed to anyone yet.
• Commitment (encumbrance): an issued PO records that the business has promised to pay a supplier once it delivers. Budget reports show this as committed spend.
• Actual: the approved supplier invoice records the expense or asset and the amount owed in accounts payable.

In the laptop example, the marketing budget would show $24,000 reserved after the requisition, $24,990 committed after the PO, and $22,506 actual after the first invoice, with $2,484 still committed for the two back-ordered units. That figure is the PO total minus the amount invoiced: $24,990 − $22,506 = $2,484, which is the remaining 2 × $1,150 = $2,300 of goods plus $184 of tax. Seeing commitments as well as actuals stops a department from assuming it has money left that has in fact already been promised.

Small businesses without budget modules can get the same benefit from a simple spreadsheet listing open POs and their remaining value. Review it before approving new requisitions.

Requisitions and POs in software

Procurement tools and many accounting systems let a requester fill in a requisition form, route it to approvers automatically, and then convert the approved lines into a PO with one action. Some use catalogs of pre-approved items and prices, so the requisition already names the supplier and the PO is generated without a buyer re-keying anything. Whatever the tool, the control principle stays the same: approval of the need comes before the commitment to the supplier.

When to use a requisition, a PO, or both

Situation	Requisition?	Purchase order?
Small office supplies below a set limit	Usually not	Often not; paid by card or expense claim
Planned equipment or service purchase	Yes	Yes
Recurring supplies from a contracted vendor	One for the contract	A blanket PO covering the period
Emergency repair	Retroactive approval	Issued as soon as practical
Utilities, rent, taxes	No	Usually not

A blanket purchase order is worth knowing about. It covers repeated purchases from one supplier over a period, up to a maximum value, so you do not raise a new PO for every delivery. Suppliers then quote the blanket PO number on each invoice. The guide to the PO number on an invoice explains how suppliers should reference it.

Checklist: a sound requisition-to-order process

• A clear spending threshold above which a requisition is required.
• Requisitions include cost center, justification and an estimate with tax and shipping.
• Approvers are budget owners, defined in a written approval matrix.
• Requesters cannot issue POs for their own requisitions above a set amount.
• POs are only issued to suppliers that have completed onboarding.
• A tolerance for PO value above requisition value, with re-approval beyond it.
• Each PO line linked back to its requisition line.
• Suppliers told to quote the PO number on every invoice.
• Open POs reviewed monthly and closed when complete.

Common mistakes

• Treating the requisition as the order. Sending a requisition to a supplier, or a supplier acting on one, skips the purchasing controls and can leave terms undefined.
• Raising the PO after the invoice. "After-the-fact" POs defeat the purpose. They are sometimes unavoidable, but if they are common, the process is being bypassed.
• Estimates without tax and shipping. This makes nearly every PO exceed its requisition and trains approvers to ignore overruns.
• Self-approval. One person requesting, approving and ordering removes every check.
• Open POs left forever. Old open POs tie up budget and can be invoiced against fraudulently. Close them when the work is complete.
• Suppliers invoicing without a PO number. Many AP teams return such invoices. If you supply larger clients, ask for the PO before you start work.

For suppliers

For a supplier, the purchase requisition vs purchase order distinction is mostly invisible. You will rarely see a client's requisition, but its approval is why your client may take a week to send a PO after you quote. Once you have the PO, invoice against it precisely: same item descriptions, quantities and prices, and the PO number in a clearly labeled field. The free invoice generator includes a PO field and produces a PDF you can submit by email or upload to a portal. It does not send or track the invoice for you.

For more side-by-side explainers, browse the comparison articles.