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Purchase order

A purchase order (PO) is a document a buyer sends a supplier, committing to buy named goods or services at agreed prices. Once the supplier accepts it, it is a contract.

Example

PO-4520: 12 downlights at $18, delivered to site by Thursday.

Also called a PO or a supplier order.

Make a purchase order free

What it means in practice

A purchase order is the order in writing: what you want, how many, at what price, delivered where and when, which the purchase order generator lays out for you. Once the supplier accepts it, it is a contract, and it is what you check the delivery and the supplier's invoice against.

Give purchase orders their own number series. Mixing them into your invoice numbers leaves gaps that have to be explained later.

A purchase order followed from raising to paymentThe client raises PO 88-2291, the work is done, invoice INV-2026-0041 quotes the number, the two are matched at 1,299 and the invoice is paid.WHY THE INVOICE IS SITTING THEREHarbor Property Group raise PO 88-2291 before the work startsClientraises the POPO 88-2291Youdo the work14 Oak StreetInvoicequotes the POINV-2026-0041MatchedPO meets invoice1,299 = 1,299Paid14 October1,299.00No PO number on the invoiceIt never reaches the person who can approve it. Nobody rejects it and nobody tells you.
The purchase order comes first and the number travels with it. An invoice that arrives without it has nothing to be matched against.

Where it shows up on the paperwork

Your details, the supplier's, a PO number, the order date and the required-by date, the items with quantities and prices, and the delivery address and terms.

What goes wrong

  • Ordering by phone with no document, then arguing about the price on the supplier's invoice.
  • Leaving off the required-by date, which is the only thing the supplier plans around.
  • Mixing PO numbers into your invoice series.

Common questions

Is a purchase order legally binding?

Once the supplier accepts it, generally yes: it is an offer to buy on stated terms. That is why the quantities, prices and dates on it matter.

What is the difference between a purchase order and an invoice?

A purchase order goes out from the buyer before the goods; an invoice comes back from the seller after. On a job you issue POs to suppliers and invoices to clients.

Two ways to send the document

Download it and send it yourself, and nothing is stored on our servers. Or send it as a link and stop wondering whether it arrived, was read, or is sitting in a queue because something is missing from it.

How invoice tracking worksBuild a document free

The first four documents you send as a tracked link are free with an account. Everything else on InvoiceTools.com stays free. Generators, calculators and downloads need no account; template designs need a free one.