Requisition: Definition for AP Teams

A requisition is the internal request to purchase, made before a PO or vendor price exists. See what it authorizes and where it creates audit exposure.

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Requisition: Definition for AP Teams

A requisition is the internal request an employee or department submits to ask for a purchase before any vendor order is created. It sets out what is needed, how much, and which budget covers it, and routes to an approver before procurement acts on it.\n\nIn a three-way match, the requisition sits upstream of the purchase order and the invoice. It establishes need and authorization, not price, which is why the documents built on top of it carry the real audit weight.

A requisition is where spend starts, and it is also where most invoice-review programs stop looking closely.

1. What does a requisition actually authorize?

A requisition authorizes procurement to source a purchase against a stated need and budget. It does not lock in a vendor, a unit price, or contract terms. Those get set when the purchase order is issued. Treating requisition approval as price approval is a gap worth naming: the person who approved the need never saw the rate the invoice will later carry.

That gap is why a requisition cannot substitute for contract matching later. Its scope statement, quantity, category, and cost center, gives auditors the basis to trace an invoice line back to a legitimate business need rather than a vendor-added charge.

2. How does a requisition differ from a purchase order?

A requisition is an internal ask; a purchase order is the external commitment sent to a vendor once the requisition is approved. The PO carries pricing, delivery terms, and often a reference to the underlying contract or rate card. An invoice should match the PO, and the PO should match the contract. The requisition sits one step earlier and rarely carries pricing detail at all.

Confusing the two during review can let a rate mismatch pass through unquestioned. Billed scope beyond contract often traces back to a purchase order that drifted from what was requisitioned in the first place, a gap the requisition record can help surface.

3. Where do requisition gaps create audit exposure?

An invoice line with no requisition or purchase order behind it lacks the internal trail showing the spend was requested and approved. That gap does not prove overbilling, but it removes the normal check that would have caught it, since nobody reviewed the price against a stated need before the invoice arrived.

Categories with recurring, ad hoc purchasing see more of this gap because low-dollar buys often bypass the requisition step. A maintenance and repair call placed directly by a plant manager, or MRO and Class C consumables reordered outside procurement, can reach the invoice stage with no requisition trail at all.

4. How should a requisition threshold be set?

A requisition threshold is a policy decision about the dollar amount or category above which a purchase requires prior internal approval before an order is placed. Set too high, it lets recurring mid-size spend through without review. Set appropriately, it forces the categories most prone to drift through a documented approval step before commitment.

The threshold is a control lever, not a fixed accounting rule. Contract labor and staffing spend, for example, often warrants a lower threshold than general supplies because rate and premium terms are easy to misapply once a requisition is skipped.

For the wider pattern this sits inside, start with the margin drift guide.

5. Frequently Asked Questions (People Also Ask)

What is a requisition in accounts payable terms?

A requisition is the internal document an employee submits to request a purchase before any order exists. It states what is needed, the quantity, and the budget it draws against. Once approved, it authorizes procurement to create a purchase order. It carries no vendor pricing commitment on its own.

Is a requisition the same as a purchase order?

No. A requisition is an internal request; a purchase order is the vendor-facing commitment procurement issues after approval. The requisition states need, the PO states price and terms. Confusing the two during invoice review can let a rate mismatch pass unnoticed.

Does every purchase need a requisition?

Most ERP configurations require one above a dollar threshold or for defined categories, but the threshold itself is a company policy choice, not a fixed rule. Below the threshold, purchasing can bypass the requisition step, which is exactly where unreviewed spend accumulates.

Who approves a requisition?

Approval routing is set in the ERP and typically follows budget ownership and dollar amount, escalating to a manager, department head, or finance depending on size. The approver confirms need and budget availability, not whether the requisition matches an existing rate card.

Can a requisition prevent invoice overbilling?

A requisition alone cannot, because it exists before a vendor price is locked in. Prevention depends on what happens next: whether the resulting purchase order carries the correct contract rate and whether the invoice is matched against that order before payment.

Why does requisition data matter for a margin drift review?

The requisition trail shows what was actually requested and by whom, which lets an auditor trace an invoice line back to a legitimate need rather than a vendor-initiated charge. A line with no requisition behind it is a flag worth checking first.

1. What does a requisition actually authorize?

A requisition authorizes procurement to source a purchase against a stated need and budget. It does not lock in a vendor, a unit price, or contract terms. Those get set when the purchase order is issued. Treating requisition approval as price approval is a gap worth naming: the person who approved the need never saw the rate the invoice will later carry. That gap is why a requisition cannot substitute for contract matching later. Its scope statement, quantity, category, and cost center, gives auditors the basis to trace an invoice line back to a legitimate business need rather than a vendor-added charge.

2. How does a requisition differ from a purchase order?

A requisition is an internal ask; a purchase order is the external commitment sent to a vendor once the requisition is approved. The PO carries pricing, delivery terms, and often a reference to the underlying contract or rate card. An invoice should match the PO, and the PO should match the contract. The requisition sits one step earlier and rarely carries pricing detail at all. Confusing the two during review can let a rate mismatch pass through unquestioned. Billed scope beyond contract often traces back to a purchase order that drifted from what was requisitioned in the first place, a gap the requisition record can help surface.

3. Where do requisition gaps create audit exposure?

An invoice line with no requisition or purchase order behind it lacks the internal trail showing the spend was requested and approved. That gap does not prove overbilling, but it removes the normal check that would have caught it, since nobody reviewed the price against a stated need before the invoice arrived. Categories with recurring, ad hoc purchasing see more of this gap because low-dollar buys often bypass the requisition step. A [maintenance and repair](/glossary/maintenance-and-repair-audit) call placed directly by a plant manager, or [MRO and Class C consumables](/glossary/mro-and-class-c-consumables-audit) reordered outside procurement, can reach the invoice stage with no requisition trail at all.

4. How should a requisition threshold be set?

A requisition threshold is a policy decision about the dollar amount or category above which a purchase requires prior internal approval before an order is placed. Set too high, it lets recurring mid-size spend through without review. Set appropriately, it forces the categories most prone to drift through a documented approval step before commitment. The threshold is a control lever, not a fixed accounting rule. Contract labor and staffing spend, for example, often warrants a lower threshold than general supplies because rate and premium terms are easy to misapply once a requisition is skipped. For the wider pattern this sits inside, start with the [margin drift](/insights/margin-drift-spend-leakage-guide) guide.

Questions & Answers

What is a requisition in accounts payable terms?

A requisition is the internal document an employee submits to request a purchase before any order exists. It states what is needed, the quantity, and the budget it draws against. Once approved, it authorizes procurement to create a purchase order. It carries no vendor pricing commitment on its own.

Is a requisition the same as a purchase order?

No. A requisition is an internal request; a purchase order is the vendor-facing commitment procurement issues after approval. The requisition states need, the PO states price and terms. Confusing the two during invoice review can let a rate mismatch pass unnoticed.

Does every purchase need a requisition?

Most ERP configurations require one above a dollar threshold or for defined categories, but the threshold itself is a company policy choice, not a fixed rule. Below the threshold, purchasing can bypass the requisition step, which is exactly where unreviewed spend accumulates.

Who approves a requisition?

Approval routing is set in the ERP and typically follows budget ownership and dollar amount, escalating to a manager, department head, or finance depending on size. The approver confirms need and budget availability, not whether the requisition matches an existing rate card.

Can a requisition prevent invoice overbilling?

A requisition alone cannot, because it exists before a vendor price is locked in. Prevention depends on what happens next: whether the resulting purchase order carries the correct contract rate and whether the invoice is matched against that order before payment.

Margin Drift Resources