A Purchase Order is an official document sent to suppliers that authorizes them to deliver specific goods or services at agreed prices and terms.
Purchase orders formalize your commitment to purchase and create a legal obligation between you and your supplier.
Purchase orders serve multiple critical functions in your procurement process:
• Authorization - They provide formal approval for purchases and establish spending controls
• Legal protection - They create a binding agreement with clear terms and conditions
• Budget control - They help track committed expenses against available budgets
• Inventory management - They ensure timely ordering of materials to maintain optimal stock levels
• Invoice matching - They provide a reference for verifying supplier invoices against agreed prices and quantities
When creating a purchase order, pay careful attention to:
• Supplier details - Ensure the correct supplier is selected
• Item specifications - Include accurate descriptions, quantities, and unit prices
• Delivery information - Specify delivery dates, locations, and shipping instructions
• Payment terms - Define when and how payment will be made
• Special conditions - Add any specific requirements or terms in the notes section
Purchase orders integrate seamlessly with other documents in your procurement workflow:
• From quotes - Convert approved Purchase Quotes directly into purchase orders
• To receipts - Record deliveries through Goods Receipts that reference the purchase order
• To invoices - Match Purchase Invoices against purchase orders to verify pricing and quantities
The system automatically tracks outstanding quantities and amounts, helping you monitor supplier performance and ensure complete fulfillment of orders.
This form contains the following fields:
Enter the date of the purchase order. This is typically when the order is placed with the supplier.
Enter a reference number for this purchase order. This could be your PO number or any reference that helps track the order.
Select the supplier from whom you are ordering. This determines the currency and payment terms for the order.
Optionally, link this purchase order to a purchase quote. This helps track quote-to-order conversion and ensures agreed prices.
Optionally, add a description or notes about this order, such as delivery instructions or special requirements.
Enter the items you are ordering. Each line includes the item, quantity, unit price, and other details.
Check this box if the prices from your supplier already include tax. Leave unchecked if tax is added on top of prices.
Check this box to display line numbers on the purchase order. This helps reference specific items when communicating with suppliers.
Check this box to enable a discount column where you can record negotiated line-item discounts.
Select whether discounts are entered as percentages or fixed amounts.
Check this box if withholding tax applies to this purchase. This is typically required for certain types of services or suppliers.
This indicates whether the purchase order has been cancelled. Cancelled orders remain in the system for record-keeping but are inactive.