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 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 & 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 purchaser
  • Name and address of 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

You can now download a purchase order template from here for free!

Below is a modified snapshot from the linked template showing UNREAL Corp. buying 200 KG 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 but they are different and have their own specific purpose.

 

Purchase order or PO example