Purchase Order (PO)
BasicsA commercial document issued by a buyer to a seller indicating types, quantities, and agreed prices.
Detailed Explanation
Examples
- A company issues a PO for office supplies before delivery
- An invoice must reference the PO number for payment approval
Quick Q&A
What is Purchase Order (PO)?
A commercial document issued by a buyer to a seller indicating types, quantities, and agreed prices.
What does "Purchase Order (PO)" mean?
A purchase order is sent by a buyer to a seller before receiving goods or services. It formally authorizes a purchase and specifies exactly what is being ordered, quantities, prices, and delivery terms. Once accepted by the seller, it becomes a legally binding contract. Purchase orders help businesses track orders, control spending, and match invoices to approved purchases. Many organizations require PO numbers on invoices for payment processing.
When is Purchase Order (PO) used?
A company issues a PO for office supplies before delivery ; An invoice must reference the PO number for payment approval