Procurement Glossary
Confirmation of requirements: Definition, process and importance in Procurement
November 19, 2025
Confirmation of requirements is a central process step in procurement that involves the formal validation and approval of requirements requests by authorized bodies. This control mechanism ensures that only legitimate and economically viable procurement projects are pursued. Find out below exactly what confirmation of requirements means, how the process works and what strategic role it plays in modern Procurement .
Key Facts
- Formal approval process for purchase requisitions prior to procurement
- Control instance for budget monitoring and compliance assurance
- Reduces maverick buying and unplanned expenditure by up to 30%
- Digital workflows reduce processing times to just a few hours
- Legal protection through documented approval procedures
Contents
What is a confirmation of need? Definition and procedure
The confirmation of requirements forms the basis for controlled procurement processes and ensures the proper validation of all requirements.
Core elements of the confirmation of requirements
The process comprises the systematic review and approval of requirements requests by authorized persons or committees. Both technical and budgetary aspects are evaluated.
- Formal approval by authorized bodies
- Budget review and cost control
- Compliance review according to internal guidelines
- Documentation for audit purposes
Confirmation of requirements vs. order release
While the confirmation of requirements validates the basic authorization of a request, the order release only takes place after supplier selection and price negotiation. This separation creates additional control points in the handling process.
Importance in modern Procurement
The confirmation of requirements acts as a gatekeeper for all procurement activities and makes a significant contribution to cost control and risk minimization. It enables centralized control of expenditure and prevents uncontrolled procurement outside the defined processes.
Procedure: How the confirmation of requirements works
A structured approach to confirming requirements ensures efficient processes and minimizes throughput times with maximum control.
Multi-stage approval procedure
Implementation takes place via defined escalation levels, which are based on procurement volume and criticality. Standard requirements go through simplified workflows, while strategic procurements require multi-stage checks.
- Automatic forwarding according to value limits
- Parallel testing for time-critical requirements
- Escalation in the event of budget overruns
Digital workflow integration
Modern procurement systems automate the confirmation process using intelligent routing mechanisms. Integration into existing ERP systems enables real-time checks of budgets and availability. The escalation process is completely digitalized.
Quality assurance and monitoring
Continuous monitoring of processing times and rejection rates optimizes the process in the long term. KPI-based control identifies bottlenecks and enables proactive adjustments to approval structures.
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Important KPIs and targets
Demand confirmation efficiency is measured using specific key figures that make both process quality and economic effects transparent.
Lead time key figures
The average processing time from request to confirmation is the key efficiency indicator. Benchmark values are 24-48 hours for standard requests and 3-5 days for complex procurements.
- Average Approval Time (AAT)
- First-pass approval rate
- Escalation rate according to value limits
Quality and compliance metrics
The rejection rate and its causes provide information about the quality of the incoming requirements. A rate below 15% is considered the target value, while higher values indicate a need for training or process deficits. The key purchasing figures are analyzed regularly.
Profitability indicators
The cost savings from avoided procurement errors and budget overruns justify the expense of structured confirmation of requirements. Typical savings are 5-15% of the managed procurement volume through improved spend control.
Risks, dependencies and countermeasures
Inadequately designed requirements confirmation processes can lead to considerable operational and financial risks, which must be minimized through appropriate measures.
Process-related delays
Overly complex approval structures lead to longer lead times and can delay critical procurements. Particularly in the case of time-critical emergency orders, operational risks arise due to lengthy approval procedures.
- Definition of express workflows for urgent cases
- Substitution rules for vacation periods
- Automatic escalation if timeout occurs
Compliance and loss of control
Unclear responsibilities and a lack of documentation create legal risks and complicate audit procedures. Maverick buying bypasses established control mechanisms and leads to uncontrolled expenditure outside of approved budgets.
System failures and dependencies
Digitalization creates new technical dependencies, the failure of which can paralyze the entire procurement process. Backup procedures and manual fallback options are essential for maintaining business continuity in the event of system disruptions.
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Practical example
A medium-sized production company implements a three-stage requirements confirmation system: requirements up to EUR 5,000 are automatically approved by the head of department, amounts up to EUR 25,000 require additional approval from the management, and a procurement committee decides on amounts above this. Digitization via a workflow system reduces the average processing time from 5 days to 8 hours.
- 40% reduction in maverick buying cases
- Complete audit documentation
- 15% cost savings through better budget control
Current developments and effects
Digitalization and the use of artificial intelligence are revolutionizing traditional demand confirmation processes and creating new opportunities to increase efficiency.
AI-supported automation
Artificial intelligence enables the automatic pre-checking of purchase requisitions based on historical data and patterns. Machine learning algorithms detect anomalies and only forward critical cases for manual checking.
- Automatic categorization according to risk levels
- Predictive analytics for budget forecasts
- Intelligent routing decisions
Mobile approval processes
Smartphone-based approval workflows significantly accelerate decision-making processes. Managers can check and approve requests from any location, reducing throughput times by up to 60%. Push notifications ensure prompt processing.
Integration in supplier networks
Modern platforms connect internal demand confirmation directly with supplier systems. This seamless integration enables real-time availability and price queries during the approval process, which significantly improves the quality of decisions.
Conclusion
The confirmation of requirements forms the backbone of controlled procurement processes and contributes significantly to cost discipline and compliance. Modern digital workflows enable an optimal balance between necessary control and operational efficiency. Companies that implement structured confirmation of requirements processes not only reduce their procurement risks, but also create the basis for strategic spend management and sustainable cost savings.
FAQ
What is the difference between confirmation of requirements and order release?
The confirmation of requirements takes place before the supplier selection and validates the basic authorization of a requirement. Order release, on the other hand, approves the specific order after price negotiations and supplier selection have taken place. Both processes complement each other as independent control instances.
What are the usual value limits for approval levels?
Typical structures provide for individual approvals of up to EUR 1,000-5,000, department head approvals of up to EUR 25,000 and management approvals of more. The specific limits vary depending on company size, industry and risk appetite. Critical categories may require lower thresholds.
How long should a confirmation of requirements take?
Best practice values are 24-48 hours for standard requirements. Complex or high-value procurements can take 3-5 working days. Digital workflows reduce these times significantly, while manual processes often take a week or longer.
What role does the confirmation of need play in compliance?
It creates documented approval paths for audit purposes and ensures that all procurements comply with internal guidelines. Complete documentation is essential for compliance with regulatory requirements and internal control systems in accordance with SOX or similar standards.
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