{"id":11307,"date":"2024-10-31T18:58:29","date_gmt":"2024-10-31T18:58:29","guid":{"rendered":"https:\/\/www.enkash.com\/resources\/?p=11307"},"modified":"2026-03-11T11:30:18","modified_gmt":"2026-03-11T06:00:18","slug":"what-is-a-purchase-requisition-in-cost-accounting-key-role-in-procurement-and-accounting","status":"publish","type":"post","link":"https:\/\/www.enkash.com\/resources\/blog\/what-is-a-purchase-requisition-in-cost-accounting-key-role-in-procurement-and-accounting","title":{"rendered":"What is a Purchase Requisition in Cost Accounting ? Key Role in Procurement and Accounting"},"content":{"rendered":"

A purchase requisition is a business document requesting the purchase of goods and\/or services. It is used by employees to officially request purchase departments without purchasing items or services outside of the company budget, policies or procedures. After the purchase requisition is approved, it is converted to a purchase order by the procurement team, which is effectively a legal contract with the vendor.<\/p>\n

This is done to prevent fraud, track purchases, and make the procurement process more efficient. The blog highlights the difference between purchase requisition and purchase order and elaborates on how these two documents help companies become more accountable and cost-efficient in their purchasing process.<\/p>\n

<\/span>What Is Purchase Requisition?<\/b><\/span><\/h2>\n

A<\/span> purchase requisition is an internal document that is initiated in the first stage of the procurement process. It is used to request goods or services necessary for an employee or department to perform their job. A purchase requisition typically includes details like requested items, quantity, estimated price and the reason for purchase.<\/span><\/p>\n

<\/span>Key Elements of a Purchase Requisition<\/b><\/span><\/h2>\n

A typical purchase requisition document includes the following elements:<\/p>\n

    \n
  1. Name of Requestor<\/b>: The employee requesting the goods or services.<\/span><\/li>\n
  2. Department<\/b>: The department initiating the request.<\/span><\/li>\n
  3. Description of the Item<\/b>: Detail of the purchase, which can be a product or a service. It also includes the quantity, per unit price\/estimated cost.<\/span><\/li>\n
  4. Supplier Information<\/b>: Details of the preferred or suggested vendor.<\/span><\/li>\n
  5. Reason for Purchase<\/b>: An explanation for the purchase, ensuring it aligns with business objectives and requirements.<\/span><\/li>\n
  6. Approval Signatures<\/b>: Line managers and department heads review and sign off the purchase request to confirm its validity and alignment against set budgets.<\/span><\/li>\n<\/ol>\n

    <\/span>Example of a Purchase Requisition Process<\/b><\/span><\/h2>\n

    Imagine that an IT department wants to purchase new laptops to replace outdated computers. The head of the IT department fills out a <\/span>purchase requisition note with details regarding the desired laptops, such as the type of laptop, quantity, and estimated cost. After the note is approved by the department manager and checked by the purchasing team, the request will continue through the procurement workflow. It will be eventually marked as a purchase order and be assigned to a vendor.<\/span><\/p>\n

    <\/span>What is a Purchase Requisition in Cost Accounting?<\/b><\/span><\/h2>\n

    Purchase requisition helps maintain proper records in cost accounting, effectively controlling costs. Cost accounting is a key area in business management and a branch of accounting that focuses on capturing a company’s total production costs by assessing its variable and fixed costs. Purchase requisition helps companies assign their purchasing costs to the appropriate department or project.<\/span><\/p>\n

    For example, a factory manager submits a purchase requisition for raw materials, which can be traced back to the appropriate production line. This enables management to view which departments, or even specific projects, are incurring costs. It also provides clarity for any decisions that management might need to make around resource allocation or budgets.<\/span><\/p>\n

    Integrating <\/span>purchase requisitions into cost accounting offers business benefits like:<\/span><\/p>\n