By The PaperLess Team
AP Automation Specialists | 1000+ Invoice Processing Implementations | Experts in Purchase Order Management and Procurement Control
PO requisitions are where most procurement disasters start. Employees want something. They submit a request. It gets lost in email. Two months later, no one can remember what was approved. Money gets spent on the wrong thing. Budget is blown.
We’ve helped hundreds of companies set up proper PO requisition workflows that give teams visibility and control. This guide answers the questions we hear most often about how to structure PO requisitions that actually work.
Understanding PO Requisitions
Q: What’s the difference between a requisition and a purchase order?
A: Requisition is the request. PO is the commitment. Employee says ‘I need this product.’ That’s a requisition.
Procurement approves it and creates a purchase order to the vendor. That’s the PO. Vendor sees the PO, ships the goods, invoices against the PO.Requisition is internal. PO is external. Both matter, but they’re different documents at different stages.
Q: Why do we need a requisition process if we’re just going to create a PO?
A: Control. Budget. Approval. Without requisitions, anyone can order anything and you’ve got no visibility until the invoice shows up.
With requisitions, you control what gets ordered before it gets ordered. You check budget. You approve vendors. You make sure it’s necessary.Saves money. Prevents waste. Gives you visibility.
Q: Who should be able to submit a requisition?
A: Depends on your company. Some restrict it to department managers. Some let any employee submit.
Fair few companies do it by role. Managers can requisition anything for their team up to budget. Finance can requisition office supplies. Doesn’t matter too much as long as you’re consistent and people know the rules.
Q: What should a requisition include?
A: Product description. Quantity. Estimated cost. Account code or cost centre. Reason for purchase. Urgency. Preferred vendor if there is one.
More detail you get upfront, easier it is to approve and create the PO. If requisition just says ‘office stuff’ with no detail, approver can’t do their job.
Q: Should we require requisitions for all purchases?
A: Probably not for everything, no. Small routine purchases don’t need requisitions. Say under fifty pounds for regular vendors.
But anything significant? Yeah, get a requisition. Protects everyone. Shows there was a business need and approval happened.
Requisition Approval and Workflow
Q: How many approval levels do we need for requisitions?
A: Depends on your company size and spending. Small company might do one level. Large company might do three or four.
Maybe Department Manager approves under two thousand pounds. Finance Director approves two thousand to ten thousand. CFO approves over that. That’s three levels and covers most companies well.What matters is being consistent. Define rules upfront. Stick to them.
Q: Who should approve requisitions?
A: Usually it’s the department manager requesting it, or a higher-level manager. They know whether the purchase actually makes sense.
Honestly, procurement might route requisitions based on category too. IT equipment goes to IT Manager. Facilities go to Facilities Manager. Makes sure approver genuinely understands the category and can make a proper decision.
Q: How long should requisition approval take?
A: Ideally same day. If something’s urgent, approval should happen in hours, not days.
Most companies see requisitions approved within two to three days. If it’s taking a week, approvers are too busy or you’ve got too many approval levels.
Q: What if a requisition gets rejected?
A: Requester needs to understand why. Maybe it doesn’t fit budget. Maybe vendor isn’t approved. Maybe timing isn’t right.
Good approval systems let approver add comments explaining rejection. Then requester can address the issue and resubmit if needed.
Q: Can employees appeal a rejected requisition?
A: Depends on your process. Some companies allow one escalation. If manager rejects, employee can ask CFO to review.
Most don’t allow appeals. If manager said no, that’s the decision. Stops arguments and keeps process clear.
Requisitions and Budget Control
Q: How do we tie requisitions to budgets?
A: Right, so ideally your system checks available budget before approval. Requisition says two thousand pounds, system checks if the department actually has two thousand in budget.
If budget exists, approved. Done. If budget doesn’t exist? Gets flagged for higher-level approval or rejected outright. Basically, it stops departments from spending money that isn’t actually allocated. You know, that thing that happens when someone orders something and Finance later discovers there’s no budget for it? With requisitions, won’t happen.
Q: What’s the difference between budgeted and unbudgeted spending?
A: Budgeted is planned. Like, Finance said ‘we’re spending two grand on IT this quarter’ and department’s using their allocation. Unbudgeted is when something pops up that wasn’t in the plan.
Unbudgeted purchases might need higher approval level, honestly. If a department requests something that wasn’t in budget, Finance Director or CFO needs to approve it because it’s discretionary spend. Someone has to sign off on pulling money from reserves or contingency.
Q: How do we handle emergency purchases?
A: Yeah, you need to define what emergency actually means. Something breaks and needs replacement today? That’s emergency. Someone decides they want something different? That’s not emergency.
Fair few companies have a process where emergency purchases bypass normal requisition but need CFO notification and full documentation afterwards. Controls spend while allowing urgent action when you genuinely need it.
Q: Should we set spending limits by employee or department?
A: By role or department makes more sense than by individual. Managers get higher limits than coordinators. Finance gets different limits than operations.
Standardise it so people know where they stand. Much cleaner than individual limits.
Q: How do we forecast budget based on requisitions?
A: Track pending requisitions. If a two thousand pound purchase has been approved but not yet invoiced, that’s a committed cost.
Good requisition system shows pending commitments so Finance can see true budget position. Invoiced costs, purchased costs, approved costs. Full picture.
Requisitions and Vendor Management
Q: Should requisitions require an approved vendor?
A: For most categories, yeah, definitely. Have an approved vendor list. If employee wants to order from a vendor on that list, the approval process of the requisition is quite fast.
But if employee wants a non-approved vendor? Needs higher approval. Gives you control over who you’re actually spending with and helps you negotiate better volume discounts across vendors.
Q: Can we get competitive bids through the requisition process?
A: For large purchases, absolutely. Any purchase over five thousand pounds, for example, might require three quotes before procurement creates the PO.
Requisition gets submitted, procurement collects quotes from approved vendors, then PO is issued to the lowest-cost option. Honestly, saves cash and ensures you’re not getting ripped off. Best value from the vendors you actually approved.
Q: How do requisitions link to invoices?
A: Requisition becomes PO becomes invoice. When invoice arrives, it should match the PO. When PO is matched to invoice, you’re verifying the purchase happened as requisitioned.
When that PO’s matched to the invoice, you’re verifying everything happened the way it was supposed to. Requisition said fifty units at two quid each. Invoice matches? Grand. Requisition approval is just the first stage. Actual control comes from matching invoice to PO and approving for payment.
Q: What if actual costs are higher than requisitioned?
A: Yeah, invoice should match the PO. Quantity, price, everything. But if actual costs are higher than what was approved? That’s a problem. Needs approval.
Employee requisitioned two thousand pounds, actually cost twenty-five hundred? Finance Director needs to approve the overage. Prevents the creep where costs just keep going up and no one’s paying attention. Keeps people honest about their estimates.
Q: Should we require purchase orders for all requisitions?
A: Yes, for anything above your threshold. PO is the official commitment to vendor. Creates paper trail. Vendor knows what they’re getting paid.
Requisitions and Different Systems
Q: How do requisitions work with Sage?
A: Sage has a requisition module but it’s pretty basic. Better to use dedicated PO requisition software that integrates with Sage.
Dedicated system captures requisitions, routes to approvers via email, then posts to Sage automatically. Users don’t touch Sage, don’t need to. Just get approval emails in their inbox.
Q: Can requisitions integrate with our invoice approval system?
A: Absolutely. Requisition creates PO creates invoice. All three should be linked in the system.
When invoice arrives for approval, system shows original requisition and PO so approver can verify everything matches. Makes approval much easier.
Q: How do we connect requisitions to invoice approval workflows?
A: Right, so requisition approval is early control. You’re controlling what gets ordered before it even gets ordered, which is brilliant. Invoice approval is final control—controlling what gets paid. Different stages, different controls, both matter genuinely.
Some companies integrate them into one system. Approval engine handles requisitions, POs, and invoices all together. Consistent approach, easier to manage, single audit trail.
Q: Should requisitions go to the same approvers as invoices?
A: Not always, no. Manager might approve requisitions for their team because they know what the team needs. Finance approves invoices for payment because they know cash position.
Different roles, different controls, genuinely. But same system can handle both. Routes requisitions one way, invoices another way based on rules. Makes life easier for everyone.
Requisition Performance and Compliance
Q: How do we measure requisition efficiency?
A: Track average approval time. Track approval rate (percentage of requisitions approved versus rejected). Track time from requisition to PO creation.
If approvals happen same-day and ninety percent are approved, that’s healthy. If approvals take a week and rejection rate is high, you’ve got a process problem.
Q: How do we prevent fraudulent requisitions?
A: Approver review is the main control. Approval workflow should highlight unusual requisitions.
Maybe requisitions outside normal product categories get flagged. Or requisitions with no business justification. Or from new employees. Approver sees the flag and reviews carefully.
Q: What audit trail should we keep for requisitions?
A: Who submitted, when, what was requested. Who approved, when, any comments. Any changes made. Full record of what happened.
Auditors want to see that requisitions were properly reviewed before purchase. System should record this automatically.
Q: How long should we keep requisition records?
A: Same as POs and invoices. Usually seven to ten years depending on your industry. Audit requirements dictate retention.
Most systems keep records indefinitely so it’s not a practical issue. Just need to know your legal requirements.
Advanced Requisition Features
Q: Can requisitions use templates?
A: Yeah, super useful actually. Common purchases like office supplies or software licenses can have templates pre-filled with standard details.
Employee selects template, fills in quantities, adds notes, done. Bosh. Reduces time and errors. Works especially well for routine purchases where you’re buying the same stuff over and over.
Q: How do requisitions fit into the wider procurement and AP automation picture?
A: Right, so requisitions are basically the start of the whole flow. Employee requests something. Requisition gets approved. PO is created. Goods arrive. Invoice shows up and gets matched to PO. Then invoice is approved for payment.
Integrated system handles the whole cycle. Requisition approval, PO creation, invoice matching, invoice approval. One platform, one audit trail, no gaps. View our case studies for examples of companies managing the whole thing in one system.
Getting Started with PO Requisitions
If you’re currently managing purchase requisitions with email and spreadsheets, you’re losing control and visibility. Talk to us about how to set up requisition workflows that give you control before purchases happen. Download PaperLess from Sage UK Marketplace, Sage Intacct, or the Xero App Store.
About This Article
These answers come from PaperLess Europe, an AP automation specialist with over 1,000 implementations of procurement and invoice processing systems. We’ve helped companies across Sage, Xero, Orderwise, and SAP Business One build requisition workflows that control spend and prevent waste.
Need help with PO requisitions? Book a free demo or contact us.
Download PaperLess from: Sage UK Marketplace, Sage Intacct Marketplace, or the Xero App Store.
