Difference between Procurement, Purchase Orders, and Requisitions

To people outside the procurement industry, terms like Procurement, Purchase Orders, Requisitions, and the like might all sound like the same side of a very business-like coin. But there are important differences between all three.

Sure, they all play an important part in the business supply chain, and they sound impressive when strung together properly in a sentence — “Hey, Barry, did you write up a purchase order for the hula hoops requisitioned for procurement by human resources?”

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But, they are all different. Knowing the difference between Procurement vs Purchase Orders vs Requisitions could save you time, money, and embarrassment at the next staff party.

Here’s a quick guidelines on the differences between Procurement, Purchase Orders and Requisitions.

Procurement vs. Purchase Orders vs. Requisitions

By Procurify

There are differences, and knowing them might save you some embarrassment. 

  • What is Procurement?

    By Procurify

    Procurement is the process by which a company—or adepartment within a company—selects the vendors and suppliers it will do businesswith. It also refers to the process of negotiating contracts and acquiring thegoods and services needed. 

  • Procurement in Action

    By Procurify

    Let's say Mabel wants 300 blue pens but Mabel's company has never ordered 300 blue pens before. Mabel's company will go through a process of selecting a vendor, negotiating a contract and acquiring the pens. That's all procurement. 

  • What's a Requisition?

    By Procurify

    The requisition is the request from a person in a company to that company's purchasing department to place an order. Mabel would send a requisition to head office for 300 blue pens.

  • More About Requisitions

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    Some companies allow small purchases to be made without arequisition. Mabel, for example, might be allowed to purchase five bluepens without a requisition, but has to fill out a requisition order for morethan 10 pens.  

  • What's a Purchase Order (PO)?

    By Procurify

    The purchase order is the paperwork sent to a supplier officially purchasing the goods. Mabel's company would send a purchase order to Pens Inc., when the company purchases the 300 blue pens.  

  • Purchase Order Approval

    By Procurify

    A purchase order is also a great way for a company to keep records on what has been purchased, by whom, and when. It provides proof that a requisition has been approved and enables the company to keep track of when new stock is expected. It also provides a record of the company's spending.

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