How to write a purchase order
- Add buyer and vendor. Your company goes in Buyer; the supplier goes in Vendor.
- Say where and when. Set the ship-to address and the date you need delivery by.
- List the items. Use the supplier's SKU or part number in the description, with quantity and agreed unit price.
- Set payment terms. Net 30 is typical. The vendor's invoice should match these terms.
- Send and track. Download the PO, send it to the vendor and match their invoice against it when it arrives.
Why use purchase orders
- Control spending
- Nothing is bought without an approved PO number.
- Three-way match
- Compare the PO, delivery note and vendor invoice before paying.
- Clear agreement
- Price, quantity and delivery date are written down before the order ships.
Frequently asked questions
Is a purchase order a contract?
Once the vendor accepts it, a purchase order usually becomes a binding agreement on the listed terms.
What is the difference between a PO and an invoice?
The buyer sends a purchase order to place an order. The seller sends an invoice to ask for payment once the order is fulfilled.
What should a PO number look like?
Any unique, sequential format works, for example PO-2026-0042. Vendors will quote it on their invoice.