Digital Engineering Guide
A controlled procurement workflow separates the request for something from the commercial commitment, physical receipt and financial liability. Understanding each stage makes automation and approvals far easier to design.
PR — Purchase Requisition
The requisition records the internal need. It should identify project or cost center, item, quantity, required date, specification and requester. Approval confirms that the organization authorizes procurement to proceed—not that a supplier has already been selected.
RFQ — Request for Quotation
The RFQ communicates the requirement to potential suppliers. Commercial comparison can evaluate price, lead time, payment terms, compliance, warranty and other criteria.
PO — Purchase Order
The purchase order is the formal commercial commitment to the selected supplier. It should preserve approved quantities, prices, taxes, delivery terms and project/cost allocation.
GRN — Goods Receipt Note
The GRN confirms physical receipt. Partial deliveries should be recorded against the PO without falsely closing the balance. Inspection or quality status may be separate from simple receipt.
Supplier invoice
The invoice creates the payable subject to validation. A three-way match can compare PO, GRN and invoice to identify quantity or price differences before payment.
Why the workflow matters for project control
The PR shows demand, the PO shows committed cost, the GRN shows received value and the invoice/expense supports actual cost. Linking those stages to the project gives management a much clearer picture of budget exposure.
Frequently asked questions
Can a requisition become a PO automatically?
It can be automated after required approvals and supplier/commercial rules are satisfied, but control design should prevent unauthorized commitments.
What happens with partial delivery?
The GRN should record only the received quantity and leave the remaining PO balance open.
Why is three-way matching useful?
It helps prevent payment for quantities not ordered or not received and highlights pricing differences.
Practical example
Project-oriented systems such as PSEMIC ERP can link requisition, purchasing, receiving and project-cost reporting in one workflow.
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