What is a purchase order?
A purchase order is how a business places a formal order with a supplier. It fixes the items, quantities, prices and delivery terms in writing before anything ships, which avoids disputes and makes the supplier's invoice easy to check.
What to put on a purchase order
- A PO number that suppliers can quote back to you.
- Buyer and vendor details, plus the ship-to address if it differs from yours.
- Items with SKU or part number, quantity and unit price.
- The delivery date, shipping method and any delivery instructions.
- Terms: payment terms, what happens if goods are late or wrong, and who to contact.
Purchase order vs quote
A supplier sends you a quote to offer a price; you reply with a purchase order to accept it and place the order. Put the supplier's quote number in the reference field so both documents can be matched.
On the other side of the deal, your supplier confirms the order with a sales order and ships it with a packing slip.