Purchase Order

What is a purchase order?

A purchase order (PO) is a formal document a buyer sends to a seller to request goods or services. It specifies exactly what's being ordered, how much, at what price, and when it's needed. Once the seller accepts the PO, it becomes a legally binding agreement between both parties.

Think of it as the buyer's official "yes" to a quote or proposal—it authorizes the work and commits to payment.

What's included in a purchase order

A standard purchase order typically includes:

• PO number — A unique identifier for tracking
• Buyer information — Company name, address, contact details
• Seller information — Your business name and details
• Item descriptions — What's being ordered
• Quantities and prices — How much and at what cost
• Delivery date — When it's needed
• Payment terms — When and how payment will be made
• Shipping address — Where to deliver

Purchase order vs. invoice

A purchase order comes from the buyer before work begins—it's a request and authorization. An invoice comes from you (the seller) after work is completed—it's a request for payment. The PO says "please do this work," the invoice says "please pay for the work done."

Working with purchase orders

Many commercial clients and government agencies require POs for all purchases. When you receive one, review it carefully to confirm the details match your quote. Reference the PO number on your invoice to ensure smooth payment processing. If anything is unclear or incorrect, clarify before starting the work.