In this article
You might like
No items found.
See insights on how 25k+ customers spent on Ramp in 2024
4.8 stars
1,900+ reviews
Error Message
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Spending made smarter
Easy-to-use cards, spend limits, approval flows, vendor payments —plus an average savings of 5%.1
|
4.8 Rating 4.8 rating
Error Message
No personal credit checks or founder guarantee.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Get fresh finance insights, monthly
Time and money-saving tips,
straight to your inbox
|
4.8 Rating 4.8 rating
Thanks for signing up
Oops! Something went wrong while submitting the form.
Table of contents

If you want your procurement process to flow smoothly, you need to understand each step of the process and all the documents involved. To help you do that, we’ll dive into  purchase request vs purchase order differences in this article.

Purchase requests and purchase orders play a crucial role in the procurement process. By understanding the role of each of these documents, you can streamline your procurement activities, maintain control over spending, and ensure that the right products or services are acquired at the right time and price.

But the problem is that it’s easy to get confused between purchase request vs purchase order.

Purchase requests and purchase orders are two distinct documents that serve different purposes in the procurement process. A purchase request is an internal document that an authorized employee of your company can use to initiate the procurement of goods or services. On the other hand, a purchase order is a legally binding contract between you and a supplier, which is issued after a purchase request has been approved.

While both these documents are closely related, they serve different functions and should be used accordingly. To help you understand the purchase request vs purchase order differences better, let’s examine each one in detail.

Understanding purchase requests

A purchase request is the initial document that serves as the foundation for the procurement process. It outlines the need for a specific product or service, detailing the required specifications, quantities, and delivery timeline. Any authorized employee of your company can send a purchase request to the purchasing department, who will then evaluate the need, identify potential suppliers, and initiate the purchasing activities.

You might be wondering if it’s worth the administrative burden of having employees and departments send you multiple purchase requests. In short, yes.

Benefits of using purchase requests

There are several benefits of using purchase requests, including:

  • Efficient sourcing and purchasing by using purchase requests to clearly communicate procurement needs.
  • Preventing unauthorized spending by ensuring only authorized personnel can initiate purchases.
  • Better budgeting and resource allocation based on cost estimates from purchase requests.
  • Creating a clear audit trail for purchase activity within your organization.

To take advantage of these benefits, you must ensure purchase requests are sent in the approved format and contain all important information, which we’ll list in the next section.

Key information to include in purchase requests

To maintain proper records and for ease of administration, please ask all authorized employees to include the following information in purchase requests:

  • Name and department of the employee requesting the purchase.
  • The date the purchase request is submitted.
  • Clear and detailed description of the requested goods or services, which can include specifics like model numbers, part numbers, or desired features.
  • The exact quantity of units or hours of service needed.
  • An estimate of the total cost for the requested items.
  • A brief explanation of why the purchase is necessary and how it aligns with the company's needs.
  • A timeframe or expected delivery date for the requested items.
  • A preferred vendor, if there is one. However, the procurement department will have final say on the chosen vendor.

Now that you understand what a purchase request is, what its contents and benefits are, let’s look at the procurement process workflow.

The purchase request to purchase order workflow

When an authorized employee sends a purchase request to the purchasing department, it kicks off a purchasing workflow that looks something as follows.

Here are the steps involved in this workflow:

  1. An employee or department identifies a need for specific goods or services.
  2. The employee fills out a purchase request form, usually through an internal system, dedicated form, or approved format.
  3. The purchase request goes through an approval process internally, ensuring proper authorization and budget allocation.
  4. If approved, a purchase order (PO) is issued to the chosen vendor, formally outlining the agreed-upon terms for the purchase.

Next, let’s take a look at what the purchase order is and its role in the procurement process.

Understanding purchase orders

After a purchase request is approved, the next step is the creation of a purchase order, which is a formal document that communicates the agreed-upon terms and conditions to the chosen vendor. It serves as a legally binding contract between your company and the vendor, ensuring that both parties are aligned on the details of the transaction.

The purchase order plays a vital role in managing the procurement process, as it provides a clear paper trail and documentation of the transaction. It can help you track the status of the order, monitor the delivery timeline, and ensure that the received goods or services match the original request. To learn more about purchase orders in detail, read our article on what a purchase order is and how it works.

Now that we’ve covered both documents in detail, let’s just summarize the purchase request vs purchase order difference.

Purchase request vs purchase order: A comparison

Here is a brief comparison of purchase request vs purchase order, to highlight the key differences:

Purchase Request

Purchase Order

Purpose

Initiates internal process to acquire goods/services.

Formal document sent to vendor outlining agreed-upon terms.

Circulation

Internal (within your company).

External (sent to the chosen vendor).

Approval Workflow

Within the company for authorization & budgeting.

Vendor approval not required.

Included Information

  • Requester information
  • Date
  • Item description & quantity
  • Estimated cost
  • Justification for purchase
  • Delivery needs
  • Preferred vendor (optional)
  • Buyer & seller information
  • PO number
  • Order date
  • Item description, quantity, & unit price
  • Total price
  • Delivery information
  • Payment terms
  • Terms & conditions

Role In Procurement

Starts the procurement process.

Formalizes the purchasing agreement with the vendor.

Thus, by understanding the purchase request vs purchase order differences and effectively utilizing them, you can streamline your procurement activities and ensure that the right products or services are acquired at the right time and price.

However, all the documents involved and the workflow of the procurement process requires significant time and effort to execute efficiently. That’s why you should consider automating your procurement processes.

Advantages of automation in managing purchase requests and purchase orders

There are several advantages of automating the management of purchase requests and purchase orders:

  • You can automate tasks like data entry, routing approvals, and purchase order generation, which minimizes human error, ensures consistency across documents, and frees up employees for more strategic work.
  • You can process purchase requests and purchase orders quicker, leading to faster fulfillment, which  can lead to better negotiation opportunities with vendors for potential discounts.
  • You can streamline the approval process with automated workflows and electronic approvals.
  • You can get real-time insights into spending patterns, inventory levels, and approval status of purchase requests and purchase orders.
  • You can enforce spending limits and internal controls, reducing the risk of unauthorized purchases, while also saving on labor costs associated with managing purchase requests and purchase orders.
  • You can optimize inventory levels, prevent overstocking, and minimize storage costs.
  • You can have efficient and transparent communication with vendors, ensuring timely order confirmations and updates.
  • You can ensure that your purchase orders are accurate and have clear details, which minimizes order fulfillment errors and disputes with vendors.

Overall, automation in managing purchase requests and purchase orders can significantly improve the efficiency, control, and cost-effectiveness of your procurement process.

But how do you automate your procurement processes?

By using a tool like Ramp’s procurement software. It can help you automate your entire procurement process, eliminate approval bottlenecks, automatically issue purchase orders from approved requests, and integrate with the tools your company already uses. Check out Ramp today!

Try Ramp for free
Error Message
No personal credit checks or founder guarantee.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Group Manager of Product Marketing, Ramp
Chris Sumida is the Group Manager of Product Marketing at Ramp, located in Ladera Ranch, California. With almost a decade in product marketing, Chris has a knack for leading successful teams and strategies. At Ramp, he’s been a driving force behind the launch of Ramp Procurement, which makes procurement easier and more efficient for businesses. Before joining Ramp, Chris worked at Xero and LeaseLabs®️, creating and implementing marketing plans. He kicked off his career at Chef’s Roll, Inc. Chris also mentors up-and-coming talent through the Aztec Mentor Program. He graduated from San Diego State University with a BA in Political Science.
Ramp is dedicated to helping businesses of all sizes make informed decisions. We adhere to strict editorial guidelines to ensure that our content meets and maintains our high standards.

FAQs

How Ramp helped Zola do more with less

“We’re trying to get into a good rhythm of closing the books within 10-12 days, and Ramp has been a huge, huge lifesaver and time saver for us.”
Joe Horn, VP Controller, Zola

How Gill’s Onions increased compliance, drove efficiency, and reduced tears with Ramp

How Dragonfly Pond Works leveled up expense management with Ramp

“Creating efficiency is an important part of an effective finance team. To scale you can’t only increase the size of the team. You have to complement with technology.”
Austin Mcilwain, CFO, Dragonfly Pond Works

How Girl Scouts of the Green & White Mountains saved 20+ hours per month with Ramp

"With the time we've saved with Ramp, we can do more of the analysis work and speed up essential processes like month-end close."
Stuart Rothberg, Finance Director, Girl Scouts, Green & White Mountains

How 8VC resolved accounting coding challenges, increased spend visibility, and cut time to close with Ramp

“With Ramp, we have complete control and governance over company-wide spend in real time...we can easily close expenses by the first week of the month versus the third or fourth week of the following month.”
Nichole Horton, Controller, 8VC

How Studs consolidated expense management, travel, and bill pay into Ramp’s single efficient platform

“Ramp Travel gives me the ability to set the controls I need, and employees the freedom and flexibility to book travel easily."
Andrew Clarke, VP Finance, Studs

How Mindbody & Classpass saved time, enhanced visibility, and improved usability with Ramp

“We were going to hold office hours, but it was so quiet that we never needed to. All the feedback was positive -- it was very easy to roll out.”
Heather Bruzus, Principal Accountant, Mindbody & Classpass