Requisition in construction

Written by LetsBuild

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There are numerous different types of requisition forms, but within the construction industry there are only two that are commonly used.  One is a construction equipment order and the other is a construction order.  Most of the time construction companies use the construction orders, because they are looking to receive payments at different points during the projects that they are working on.

After all, a requisition in construction is a bill that can be issued to a contractor, subcontractor, customer, or anyone else on a one-time, weekly, bi-weekly, or even monthly basis.  However, most of the time, the requisitions that are sent out are recurring invoices that consist of the scheduling of values and items that have been completed.

Most requisitions will include the amount of the line item that was included in the contract as well as the work that has been completed to the current date and the previous billing of that same line item.  The last part will include the billing that is currently required, which is the main reason for the current requisition.

Other items that can and or should be included on a requisition in construction include a description of a product, the quantity of that same product, the price as well as any discount on the product or products, the payment terms, shipment dates, the person sending the invoice, and notable terms and conditions.

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Most construction companies utilize the AIA requisition form, as it is easier than creating a new one, but not every contractor, subcontractor, or other people will accept them.  Some people prefer to have their own requisition forms filled out, which while they are sometimes more tedious to complete, can at least mean that payment will be sent in a timely manner.

Of course, there are many answers that are needed before a requisition can be filled out, let alone sent for a request for payment.  Those answers are needed for the following five questions:

  1. When does the person need or want to receive the requisition by? – There is no point in mailing one out at the beginning of the month if the person does not want it until the fifteenth, because it will get lost amongst all their other paperwork and it may need to be resent.
  2. What format is being requested? – This is where the construction company will need to make sure they are sending the correct requisition form, because anyone that is requesting that their personal ones are used will not respond to one that is sent on a different form.  This will mean that the construction company will need to do twice the work, as the personal requisition form will need to eventually be filled out and sent, even though a different version already was.
  3. Has the schedule of values been accepted? – If the values have not been accepted, then the requisition form may be missing vital information.
  4. Who is the invoice being sent to? – The easiest way to receive a quick payment is to make sure that the proper person is receiving the requisition.  Sending the requisition to the wrong person can mean that it has a higher chance of being lost as it makes its way to who it belongs to.
  5. What are the terms of payment? – Sending a requisition with terms that state pay in full upon receipt is not going to go over very well if the terms are supposed to be pay in full within thirty days of receipt as agreed upon.  Whoever is doing the billing will need to make sure that they have the most recent contract agreements in hand, so that they can bill accordingly.  After all, changes can occur anytime during a project, and what applied in the beginning may be different towards the end.

A requisition in construction is a necessary document, because it serves as a legal form that a contractor, subcontractor, or other clients need to abide by.  This form holds everyone accountable and ensures that each person holds up their end of the agreement that is in place.

While it would be easy for a construction company to choose to not use requisition forms, it is not advisable, because numerous payments would go missing.  Requisitions in construction ensures that construction companies are more profitable and more efficient, because they will not spend hours tracking down people for their payments and they will receive each payment in a timely manner.

It is necessary to keep all requisitions organized in a way that a specific one can be found when it is needed.  Construction companies can choose to keep paper copies, organized by date for each individual that they work with, or they can utilize one of the newer requisition computer software options that will make creating and searching for requisitions easier than ever.