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What is a Purchase Order (with Template)?

Purchase Order

purchase order (PO) is an official document generated by a buyer of goods or services as an offer for the seller; it becomes a legal document of the contract once the seller accepts the purchase order.

When a business wants to order goods it goes through a procurement process where it has to finalize a particular seller out of all available options and consequently has to begin a formal procedure to purchase the goods, generating a PO is among the first few steps of procurement of goods or services.

There are 4 different types of purchase orders such as Standard PO, Planned PO, Blanket PO and Contract PO.

Nowadays companies manage their entire procurement process with ERP systems for e.g. SAP Ariba, Oracle iProcurement, IBM Emptoris Procurement etc.

It contains the following:

  • Date of order
  • PO number
  • Name and address of the purchaser
  • Name and address of the supplier
  • Mode of transport
  • Details of purchase
  • Shipping terms
  • Payment terms
  • Shipping date
  • Quantity ordered
  • Amount
  • Details of tax (if any)
  • Signature of the authorized personnel from Seller’s side

 

Purchase Order Example Template

Below is a modified snapshot from the linked template showing UNREAL Corp. buying 200kg Oranges at the currency value of 100/kg, the total order value including taxes is 23,600.

Though a PO can look like an invoice they are different and have their own specific purpose.

 

Purchase order or PO example

 

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