Q. In many organizations, the approval of Purchase Requisitions is a critical step before the procurement process can proceed further.

Could you explain why approval of Purchase Requisitions is necessary?

Additionally, what recommendations would you provide to the business regarding this approval process, and what are the benefits or risks involved in implementing it?

A. The approval of Purchase Requisitions (PRs) is a critical control step in the procurement process because it ensures that all purchasing activities are aligned with the organization’s budget, policies, and operational needs. By implementing a structured approval process, the organization can verify whether the requested material or service is truly required, whether the quantity and specifications are appropriate, and whether funds are available. This helps prevent unnecessary or duplicate purchases and ensures accountability.

From a business perspective, it is recommended to implement a release strategy in SAP for PR approvals based on criteria such as value limits, material type, or cost centers. This allows flexibility while maintaining control. The approval process should be simple, transparent, and role-based to avoid delays. The benefits of implementing PR approval include better budget control, audit readiness, and reduced risk of unauthorized spending. However, if not designed efficiently, it can lead to bottlenecks or delays in procurement, which may impact operations. Therefore, it's important to strike a balance between control and operational efficiency.