What a purchase order is
A purchase order (PO) is the document a buyer sends a supplier to order goods or services: what, how many, at what price, delivered where and when, on what payment terms. It comes from the buyer, before delivery. An invoice comes from the seller, after, to ask for payment. Once the supplier accepts a PO, it records the agreed terms of the order.
Why small businesses use them
- A record of what was agreed, before anything ships, so disputes over price or quantity have an answer.
- Matching invoices: when the bill arrives, check it against the PO and what was actually received before you pay.
- Spending control: a numbered PO approved by the right person is a simple way to stop unapproved purchases.
What to include
- A unique PO number — the supplier should quote it on their invoice.
- Vendor and ship-to details, the order date and the date you need delivery.
- Line items with quantity and unit price, plus tax, shipping and the total.
- Payment terms (for example, Net 30) and how it should ship.
- An authorized signature.
How to use this template
Fill in the order above; totals update as you type and the draft is saved in this browser. Print or save as PDF prints only the purchase order. The Word and Excel versions have the same layout, and the Excel one does the arithmetic. If you’re choosing software to manage bills and payments, see the best accounting software for startups.