5 best practices to optimize purchase requisitions in construction

Keeping construction projects on schedule and within budget is a constant challenge. One of the biggest culprits?

Ineffective construction requisitions. 

Anyone in the construction industry knows the challenges all too well. An inefficient purchase requisition process can quickly lead to project delays, cost overruns, and strained contractor relationships. When you’re faced with multiple projects and aggressive deadlines, a reactive, paper-based process simply won’t cut it. The constant pressure to keep costs under control only adds to the challenges, especially when errors and delayed orders are common.

A streamlined purchase requisition process builds the foundation for successful construction management. It ensures timely delivery of materials and services, enabling accurate job costing, stronger relationships with contractors, and effective cost control.

This article provides a practical guide to mastering construction requisitions. We’ll break down the different types of requisitions, walk you through the requisition workflow, and share proven best practices and tips to optimize the entire process. By the end, you’ll have the tools and knowledge to:

• Eliminate bottlenecks and inefficiencies for faster, more accurate processing.
• Track and control costs to reduce overspending.
• Improve contractor communications and prevent disputes.
• Deliver materials and services on time to keep projects on track.

Let’s get started.

What is a construction requisition?

A construction purchase requisition is a formal request for materials or services needed for a project. It documents the purchase details and provides approvers with the information needed to approve the purchase.

How are purchase requisitions different from purchase orders?

A purchase requisition is an internal document that starts the procurement process. A purchase order (PO), on the other hand, is an external, legally binding agreement between the buyer and supplier. The information from the requisition is usually used to create the PO.

What goes into a construction purchase requisition form?

Construction purchase requisitions usually include the details of the requested purchase, including:

• Project name and code
• Reason for purchase
• Description of the item or service
• Specifications (if applicable)
• Quantity required
• Cost estimates
• Desired delivery date
• Delivery location
• Requestor name

By including detailed, accurate, and complete information, the requisition becomes the foundation for the purchase. It keeps everyone on the same page and minimizes the risk of errors. Let’s look at why this is important.

Why construction requisitions are important

Requisitions provide a clear record of each purchase, but their importance goes beyond record-keeping. Here are the key reasons they’re essential for successful construction procurement:

• Accuracy and financial control: Enable project cost tracking, prevent overspending, and facilitate cost accounting.
• Effective project management: Support scheduling, resource allocation, and timely project completion.
• Supply chain and inventory management: Streamline procurement, ensure material availability, maintain inventory levels, and minimize delays.
• Communication and collaboration: Foster clear communication and coordination between project teams, contractors, and suppliers.
• Complete audit trail: Provide a record of procurement activities for transparency and accountability.

Types of requisitions in construction

There are six main types of requisitions used in construction.

1. Material requisition

These are used to request materials needed for a project — such as concrete, lumber, and steel. They’re essential for maintaining proper inventory levels and preventing project delays due to shortages.

2. Equipment requisition

Equipment requisition is used when construction teams need equipment for a project. It can include hand tools, heavy equipment such as excavators, and on-site facilities such as porta-potties. 

3. Service requisition

Service requisitions are used to engage subcontractors such as electricians, painters, and landscapers. They’re also used to request specialized on-site services such as surveying, food service, and cleaning.

4. Change order requisitions

Change orders are used to request changes to an original purchase requisition or scope of work. They provide a record of the change and ensure any additional costs are captured.

5. Emergency requisitions

Emergency requisitions are used for urgent requests for materials or services needed to address unforeseen circumstances — such as material shortages, unexpected site conditions like flooding, equipment failure, or safety hazards.

6. Maintenance, repair, and operations (MRO) requisitions

MRO requisitions are used to request supplies, equipment, and services needed to maintain and repair existing equipment or facilities on the construction site. This might include equipment fueling, saw blades, drill bits, or safety gear.

The requisition process in construction

The construction requisition workflow provides a standardized process for requesting, approving, and fulfilling purchases for construction projects. Here’s a five-step breakdown of the process.

Step 1: Purchase initiation

The requisition workflow begins when an employee identifies a need for a product or service associated with a project. First, they check if the need can be met with existing inventory to avoid unnecessary purchases and use existing resources. If not, they gather the necessary information — such as project details, descriptions, quantities, and cost estimates — complete a purchase requisition, and submit it to the appropriate approver for review.

Step 2: Approval

After the approver receives the purchase requisition, they review the details and either approve or reject the requisition. Their decision can be based on several factors, including available budget or alignment with business needs. 

For companies with multi-tier approval hierarchies, the requisition may pass through several levels of authorization. For example, the project manager might approve the request, followed by the finance manager for final approval.

Once the requisition is approved, it moves to the next step in the workflow. If the requisition is rejected, the approver notifies the requestor, and the request may be revised or canceled.

Step 3: PO creation

The purchasing department receives the approved requisition, reviews the details, and selects a vendor or contractor for the purchase if one isn’t specified. After negotiating the price and delivery terms, they complete a purchase order using the information from the requisition and assign it a unique PO number. Then, they issue the PO to the vendor to formalize the purchase.

Step 4: Supplier delivery

The vendor receives the PO, reviews the details, and delivers the material, equipment, or services to the job site according to the agreed-upon schedule. Then, they send an invoice outlining the purchase details and payment terms to the buyer’s accounts payable department.

Step 5: Invoice processing and payment

The buyer’s accounts payable (AP) department enters the invoice details and matches the invoice to the PO and shipping documents to verify the purchase. If the details are correct, they issue payment to the supplier. If they aren’t correct, the AP department investigates and addresses the discrepancy with the supplier.

Now that you’ve got a handle on the construction requisition workflow, you can take a proactive approach to optimizing your own processes. By putting best practices into action, you can anticipate project needs, avoid mistakes, and make sure everyone’s got what they need to get the job done.

5 best practices for optimizing the construction requisition process

Optimizing your construction requisition process is the key to efficient financial management. Here are 5 best practices to get you there.

1. Sweat the details

Clear and complete purchase requisitions make it easier for everyone to understand what you need and what’s expected of them. They also prevent costly errors and delays. Ensure every requisition includes detailed item descriptions, accurate specifications and quantities, and clear delivery terms. This is especially important for change orders and emergency requisitions, where details can often get lost in the shuffle if they’re not written down and tracked.

2. Streamline workflows strategically

Focus on optimizing high-priority tasks for the greatest efficiency gains. Identify and address bottlenecks in your current workflow and prioritize tasks based on urgency and importance.

One effective way to streamline requisitions is to implement a tiered approval process. This involves setting different approval levels with authority based on factors like the purchase amount, project type, and risk exposure. 

For example, a low-value requisition for coffee and donuts on Fridays might only need approval from the project manager, while a high-value requisition for an excavator might require approval from the finance manager and CEO.

3. Proactive requisition management

Get ahead by proactively planning your project needs. Use your project schedules and work breakdown structure to create a detailed list of the anticipated materials and services for each project. This lets you estimate project costs more accurately, develop a more accurate budget, and engage vendors early to negotiate better pricing and terms. It also helps you identify and manage risks and minimize the need for change orders and emergency purchases.

Refine the plan in the weeks or days before the project kicks off and note any changes or unexpected needs that arise. Then, you can create accurate and up-to-date requisitions and ensure the materials and services are available when you need them.

4. Strengthen contractor relationships

According to Rabbet’s 2024 Construction Payments Report, 100% of construction contractors say they consider a company’s payment history before working with them. It’s no mystery why — 95% of general contractors and 75% of subcontractors report they’ve had to float payments while waiting to get paid.

Streamlining your requisition process and providing complete and accurate purchase details goes a long way toward improving vendor relationships. Clear communication makes sure vendors know exactly what you need, leading to accurate deliveries and invoices. This, in turn, reduces disputes and makes it easier for your AP team to process payments promptly. 

To further strengthen vendor relationships, look for ways to increase transparency in your procurement process. For example, consider implementing a vendor portal that allows vendors to access POs, send invoices, and communicate with your procurement and AP teams online. 

5. Automate procurement processes

Leverage automation technology to streamline part or all of your procure-to-pay (P2P) process. For example, here are some ways other construction companies have used automation to optimize their requisition workflows.

Integrate BIM, scheduling, and inventory systems

Look for P2P solutions that can sync with building information modeling (BIM) models, project scheduling software, and inventory systems. Integration lets you automatically extract and update specifications, quantities, and schedules to populate purchase requisitions. It also allows you to track existing stock levels and automatically trigger requisitions when supplies are low.

Automate procurement processes

Consider solutions that automate requisition creation, approval routing, and PO generation. This can reduce manual tasks and improve process efficiency and accuracy.

Improve performance with analytics and reporting

Many P2P software solutions feature real-time analytics and data reporting, letting you monitor KPIs and track spending. Leverage this data to identify bottlenecks, evaluate vendor performance, and track requisition and PO status.

Integrate with ERPs and AP automation systems

Look for P2P platforms that integrate with your enterprise resource planning (ERP), AP automation platform, or accounting system. This ensures a seamless flow of information between systems and departments, eliminating data silos and improving visibility and control of your entire P2P process.

End-to-end construction procurement with Stampli

Existing construction procurement solutions promise complete visibility and control over project costs and budgets, but often fail to deliver. More often than not, their incomplete P2P solutions leave contractors struggling to build workarounds between disconnected systems and communicate effectively with vendors. The result is compromised control, poor visibility, and endless inefficiencies.

Stampli is the first P2P solution to connect the dots between every element in the construction procurement workflow. It brings every element together, including:

• Procurement
• Accounts payable
• Payments
• Vendor management
• Internal and vendor messaging
• Documents and contracts
• Your ERP and construction software

Stampli offers an intuitive and adaptable AI-powered platform that gives construction companies complete control and visibility over procurement. 

Here’s just the start of how Stampli connects every dot from request to reconciliation, transforming procurement and AP into one seamless experience:

• Adaptive workflows that mirror your unique processes – no forced standardization.
• Built-in messaging keeps every conversation connected to the transaction, eliminating silos.
• ERP-native integrations support full functionality.
• Intuitive purchasing portal for all requests, from goods to services.
• Flexible approvals – dynamic, fixed, or hybrid to match your policies.
• Real-time budget tracking with built-in validation and control.
• AI-powered request handling that adapts based on criteria like request value, type, or department.

Stampli is AI that works for construction — letting you automate approvals, manage purchase requests, and eliminate manual tasks.

Experience Stampli for construction today and discover how Stampli helps you build a solid procurement workflow.