Purchasing basics
PR vs PO: what actually separates them
The two sit next to each other in the same process, which is why people use the words interchangeably. Legally and financially they are nothing alike.
The shortest version: a PR is asking permission inside the company. A PO is placing the order outside it.
A requisition never leaves the building. A purchase order does, and once the supplier accepts it, it binds you.
Side by side
| Purchase requisition | Purchase order | |
|---|---|---|
| Raised by | Whoever needs the thing | Purchasing |
| Sent to | Approvers inside the company | The supplier |
| Commits money? | No | Yes, once accepted |
| Price shown | An estimate | The agreed price |
| When | First | After approval is complete |
| If cancelled | Costs nothing | The supplier must be told; there may be a charge |
The order matters
The requisition always comes first. That is not etiquette, it is control. Issue the PO and collect the signatures afterwards, and the company committed money before anyone agreed to spend it — which is precisely the thing an auditor will ask about.
In practice this happens most when something breaks and has to be replaced today. The better answer is an urgent requisition with a shorter approval route, not skipping the requisition altogether.
The neighbouring documents
- Quotation — the supplier writes it for you. Attach it to the requisition so approvers see a real price
- Delivery note — arrives with the goods; used to check what came against what was ordered
- Invoice — arrives later, matched against the PO and the delivery note before anyone pays
Accounts call that last step a three-way match. When the PO number on an invoice does not match a PO you issued, expect a long afternoon.
Why keeping them separate is worth the trouble
They answer different questions. The requisition answers "did this company agree to buy it?". The order answers "what did we order, at what price, from whom?". Companies that collapse the two into one document keep hitting the same wall: there is no record of who approved anything, because the only document is the one sent to the supplier, and nobody inside the company signed that.
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