Purchase requisition vs purchase order: Key differences and when to automate

At a glance

Purchase requisitions and purchase orders serve different purposes in the procurement process.

A requisition is an internal approval request, while a purchase order is a formal agreement sent to vendors.

Clear approval paths and documentation keep spending controlled and auditable.

Moxo automates both stages with routing templates, approvals, and vendor-ready workflows for faster execution.

‍

Mixing up PRs and POs costs your company money

Procurement inefficiencies can cost companies up to 5% of annual spend, according to McKinsey. One overlooked factor is confusion between purchase requisitions (PR) and purchase orders (PO). They sound similar but serve very different purposes.

This isn’t semantics. Understanding the difference strengthens budget control, ensures compliance, and fosters better supplier relationships. Let’s break it down.

‍

What is a purchase requisition (PR) vs. a purchase order (PO)

Purchase requisition (PR): The internal green light for spending

A purchase requisition is an internal request to buy goods or services. It’s the organization’s way of ensuring that purchases are properly reviewed before funds are committed.

• Purpose: Internal control and budget validation.
• Audience: Internal teams such as managers, department heads, or finance.
• Example: A marketing manager requests approval for new design software licenses.

By requiring requisitions, companies avoid shadow spending and maintain accountability.

Purchase order (PO): The legal contract sent to your vendor

A purchase order (PO) is created after the requisition is approved. It is issued externally to the supplier and serves as a legally binding document.

• Purpose: Formalize the contract with vendors.
• Audience: External suppliers.
• Example: Procurement sends a PO to a hardware vendor for 100 laptops, confirming price and delivery.

Side-by-side: PR vs. PO at a glance

‍

‍

Approval hierarchies: Who signs off on a PR vs. a PO?

Requisitions and purchase orders follow different approval hierarchies.

Requisitions

Department managers or finance teams usually approve based on thresholds. For example, purchases under $5,000 may need only one signature, while larger requests go through finance.

Purchase orders

Procurement teams, compliance officers, or even executives may review before issuing the order to a vendor.

This multi-step flow protects the organization, but manual routing often leads to bottlenecks.

‍

What to include: Data required for requisitions vs. orders

Purchase requisition data

Requisitions include contextual details:

• Description of items or services
• Quantity requested
• Justification or business case
• Suggested supplier (optional)

This information helps approvers evaluate the necessity of the request.

Purchase order data

POs require more formal details since they act as contracts:

• Vendor contact information
• Pricing and payment terms
• Delivery timelines
• Legal clauses or conditions

Accuracy at this stage avoids disputes and delays.

‍

When to ditch manual approvals

As companies scale, manual processes often create delays and compliance risks. Automation ensures requisitions and purchase orders are routed to the right people instantly.

For instance:

• Purchases under $1,000 may auto-approve with a manager.
• Mid-range requests ($1,000–$10,000) route to finance.
• High-value requests ($10,000+) require executive sign-off.

Automation also categorizes spend by department – IT, marketing, operations – giving finance real-time visibility. Tools like Moxo provide this capability out of the box.

‍

How Moxo connects PRs to POs seamlessly

Purchase requisitions and purchase orders serve different purposes, but both require accuracy, approvals, and traceability. Moxo connects the two into one continuous, automated workflow.

With Moxo’s workflow builder, employees can submit digital purchase requisitions that automatically route for managerial or budget approval. Once approved, Moxo converts them into purchase orders with prefilled details and linked documentation.

Workflow automation ensures every request moves smoothly, while controls enforce thresholds and approval limits. Through vendor portals, suppliers can confirm orders and provide delivery updates without manual coordination.

Dashboards track requisition-to-order conversion rates and approval times, while audit trails provide complete visibility for finance and procurement compliance.

Moxo bridges the gap between requisition and order, turning two disconnected documents into one seamless procurement process.

‍

One customer noted: “With Moxo, our purchase approvals became predictable and trackable. We’ve cut PO cycle time nearly in half.”

For industry-specific examples, Moxo supports accounting, logistics, and consulting firms where procurement oversight is critical.

‍

Standardize processes and embrace automation

The difference between a purchase requisition and a purchase order may seem small, but it has real implications for compliance, budgeting, and supplier trust. Requisitions ensure internal accountability, while purchase orders formalize external commitments.

Organizations that standardize these processes and embrace automation reduce delays and gain better visibility into spending. Platforms like Moxo make this transition simple by offering ready-to-use workflows that eliminate the friction of manual approvals.

Book a demo with Moxo to see how streamlined requisition-to-order workflows can help your business move faster with fewer risks.

‍

FAQs

What is the main difference between a purchase requisition and a purchase order?

A requisition is an internal approval request, while a purchase order is an external contract sent to a vendor.

Do all purchases require requisitions?

Not always. Smaller purchases may bypass requisitions, but most organizations set thresholds to ensure oversight for larger or strategic buys.

Are purchase orders legally binding?

Yes. Once accepted by a vendor, a purchase order becomes a contract that defines obligations, pricing, and delivery.

How does automation improve requisition and order workflows?

Automation routes approvals instantly, applies thresholds consistently, and records audit trails for compliance. This reduces delays and errors.

Can Moxo support procurement workflows?

Yes. Moxo provides vendor portals, secure document collection, and workflow automation that streamline requisition-to-order processes across industries.