How to write a purchase order
A purchase order is the buyer's written offer to buy: a PO number, the date, the supplier, what you want with quantities and agreed prices, the delivery address and date, and the payment terms. Once the supplier accepts it, it becomes the agreement their invoice is checked against.
The Purchase Order Generator lays out every field and gives you the PDF. Purchase Order Generator
Writing a purchase order
- Give it a unique PO number from your own sequence.
- Add your company details and the supplier's.
- List each item with a description, quantity, unit price and line total.
- State the delivery address and the date you need it by.
- Add payment terms, such as 30 days from the invoice date.
- Have it approved internally, send it, and ask the supplier to quote the PO number on their invoice.
Why businesses use purchase orders
A purchase order puts the agreed price and quantity in writing before anything is delivered. When the invoice arrives, accounts can check it against the order and the delivery note, a routine called three-way matching, and pay only for what was ordered and received.
It also controls spending. When every purchase needs an approved order, nobody can commit the business to a supplier without somebody else seeing it.
A worked example
A cafe orders from a roaster: PO-2026-0014, dated 2 March, for 20 kilograms of house blend at 18 a kilogram, 360, and 500 takeaway cups at 0.12 each, 60. Total 420, delivery to the cafe by 6 March, payment 30 days from invoice.
When the roaster's invoice arrives quoting PO-2026-0014 for 420, and the delivery note shows 20 kilograms and 500 cups received, the three documents agree and the bill can be paid without a phone call.
Purchase order or invoice?
They travel in opposite directions. The buyer sends the purchase order to ask for goods; the supplier sends the invoice to ask for payment. The PO number printed on the invoice is what ties the two together.
Numbering and records
Use a simple sequence with a prefix, such as PO-2026-0001, and never reuse a number. Keep the approved order, the supplier's acceptance, the delivery note and the invoice together: they are the evidence an auditor asks for when a payment is questioned.
Questions people ask next
Is a purchase order legally binding?
Once the supplier accepts it, generally yes: it forms the contract for that purchase. Until then it is an offer you can usually withdraw.
Do small businesses need purchase orders?
Not always. They become worthwhile once more than one person buys things, or when suppliers deliver in parts and invoices need checking.
What is a blanket purchase order?
One order covering repeated deliveries over a period at agreed prices, with individual releases against it. It is common for regular supplies.