Indent vs purchase requisition vs purchase order: what's the difference?

An indent asks for material, a purchase requisition asks purchase to buy it, and a purchase order instructs a vendor to supply it. The first two are internal documents. The third goes outside the company and, once accepted, commits it to pay.

Many plants use 'indent' and 'purchase requisition' to mean the same thing. That's fine if everyone agrees on it, but the two steps still exist: someone states the need, and someone with authority approves spending money on it.

In an Indian plant, an indent is the request a department raises when it needs material. The word comes from British administrative usage, where an indent was an official requisition for stores, and it is used across public sector and private manufacturing alike.

Indents come in a few common forms:

• Store indent, or material issue request: asks stores to issue an item already in stock. No purchase follows.
• Purchase indent: asks purchase to buy an item that isn't in stock or isn't stocked at all.
• Emergency or breakdown indent: a purchase indent marked urgent, often approved by phone first and on paper later.
• Capital indent: a request for machinery or equipment, which follows a separate capex approval.

Paper indent books, with carbon copies signed by the department head, are still common. They work until someone needs to know whether an indent was raised, approved or already ordered, and the only record is a page on somebody's desk.

Each document must carry enough for the next person to act without phoning the last one. Missing fields are the main reason indents bounce back and POs get amended.

Indent

• Item code from the item master, or a full description for a new item
• Specification: make and part number where it matters, size, rating, grade
• Quantity and unit of measure
• Required-by date and urgency
• Purpose: the machine, line or job, and the cost centre
• Requester, department and plant
• A photo or drawing for unfamiliar parts

Purchase requisition

• Everything on the indent, carried over without retyping
• Stock position: confirmation that the item isn't available in store
• Estimated value, from the last purchase price or a budget rate
• Budget or cost centre, and whether it is capex or opex
• Approvers and approval dates, as the approval matrix requires
• Suggested vendors, if purchase has a preference

Purchase order

• PO number and date, billing and delivery addresses, and your GSTIN
• Vendor name, address and GSTIN
• Line items: item code, description, HSN code, quantity, unit, rate and discount
• GST rate and amount per line, and whether IGST or CGST plus SGST applies
• Delivery date and place, freight and packing terms
• Payment terms, warranty, and any inspection or test certificate requirements
• A reference to the PR or indent, and the PO's own approval

An indent becomes a purchase order through a stock check, an approval and a round of quotes. In a well-run plant the steps look like this:

1. Indent raised. A maintenance engineer requests four 6208-2RS C3 bearings for conveyor 3, needed within two days.
2. Stock check. Stores look up the item. If four are on the shelf, they issue them against the indent and the process ends. If not, the indent moves to purchase.
3. Purchase requisition. The shortfall becomes a PR with an estimated value, routed for approval by value and category.
4. RFQ and quotes. Purchase sends a request for quotation to suitable vendors and compares the replies, usually in a comparative statement. See how to compare vendor quotes.
5. Vendor selection. The buyer picks a quote on price, brand, lead time and terms, and records why.
6. Purchase order. The PO is created from the PR, approved if its value or vendor requires it, and sent to the vendor.
7. Delivery, GRN and invoice. Goods arrive, stores record a GRN against the PO, and accounts match the vendor's invoice to the PO and GRN before paying.

The chain matters because each document points to the one before it. When an auditor asks why ₹2.4 lakh was spent on a gearbox, the answer is a PO that references a PR, which references an indent from a named engineer for a named machine.

Plants that use an ERP often collapse the first three steps: the department raises the PR directly, and the system checks stock and routes approval. That works as long as the stock check and the approval still happen before any vendor is contacted.

Most mistakes come from skipping a step under time pressure or from documents that don't carry enough detail. These are the ones that cost the most:

• PO after the fact. Goods are ordered by phone and the PO is raised when the invoice arrives. Approval becomes a formality and there is no price comparison on record.
• No stock check. Purchase buys an item that is sitting in another store or another plant, because the indent never went past stores.
• Vague indents. 'Motor 5 HP, urgent' leaves out frame size, mounting, speed and efficiency class, so quotes come back for different motors and can't be compared.
• Split indents. A ₹3 lakh requirement raised as three ₹1 lakh indents to stay under an approval limit.
• Duplicate indents. Two shifts raise the same request for the same breakdown, and two orders go out.
• PO changed without re-approval. Quantity or price rises after approval and nobody signs again. Any increase in value should go back through the matrix.
• Tax errors on the PO. A wrong HSN code, or IGST on a purchase within the state. The error repeats on the invoice and holds up payment.

GODOWN puts the indent, its approval and the purchase order on one platform customised to your existing workflow, so every PO traces back to the request that started it. You get competitive quotes, one PO trail and a record that works alongside your ERP. See the Indent module.