Procurement terms, in plain English.

Purchase requisition (PR)

An internal request for approval to buy goods or services. It does not commit the company to a supplier.

Purchase order (PO)

The document sent to a supplier to place an order after the requisition is approved. Once accepted, it commits the company to the items, prices and terms on it.

Quotation

A supplier's written offer with prices, lead time and terms for specific items.

Quotation approval (request type)

Internal approval of a specific supplier quotation before ordering, usually with the other quotes received for comparison.

Request for quotation (RFQ)

A request sent to suppliers asking them to quote for specific items and quantities.

Three-quote rule

A purchasing policy that expects at least three supplier quotations above a set amount.

Approval matrix

A table of rules deciding who must approve a purchase, usually by department, type and value.

Approval threshold

An amount above which an extra approver, such as the COO, must sign off.

Delegation of authority (DoA)

A company's formal policy setting who may approve spending, and up to what amount. Often written as an approval matrix.

Approval delegation (out of office)

Letting a named stand-in approve on someone's behalf for set dates, with the delegation recorded.

Partial approval

Approving some line items of a request and declining others, instead of approving or rejecting the whole request.

Return for revision

Sending a request back to the requester with remarks so it can be corrected, instead of rejecting it.

Approval deadline (SLA)

The number of days a request may wait at one approval stage before it is flagged as overdue.

Price variance

The difference between a new price and the last price paid for the same part, usually shown as a percentage.

Price history

The record of the final prices paid for a part over time, used to spot increases.

Price creep

Small supplier price increases that add up over time without anyone noticing.

Committed spend

Money the company has already committed to in a period, such as approved requests and open purchase orders, compared with the budget.

Audit trail (audit log)

A record of every action: who did what, and when.

Special approval (request type)

A request type for purchases that need a written justification, sometimes with an urgent route.

Read more: PR vs PO · setting approval limits · the three-quote rule.