What is a Purchase Order?

A purchase order (or PO) is a business and accounting document that a buyer sends a vendor of service, products, or a combination thereof. It contains specific information about the price, quantity, quality, and specific conditions that must be met for a purchase transaction with a seller to occur.

Wondering what’s the deal between purchase orders vs. invoices? The former is sent by the buyer to confirm an order while the latter is sent by the seller. Invoices are also sent by sellers or service providers once they have completed a job or sent the products and they are now requesting for payment

How to Make Purchase Orders

Most purchase orders are blank sheets or forms that business owners or managers need to fill out for every official order they request. If you are looking to streamline and to track the purchasing processes of your business, it is beneficial to create a standard purchase order form that your employees must use.

Apply the tips we’ve shared below to help you craft purchase order forms that suit your business or organization.

1. Create a Standard Form

There is no standard format to follow when making a purchase order. However, if you want a more streamlined purchase order process for your business, it is best to invest in a standard purchase order form.

You may create your own purchase order forms using spreadsheet tools like MS Excel or Google Sheets. Or, you may download a pre-made purchase order template. Multiple examples are curated above.

2. Keep Tables Clean and Well-Labeled

When designing your own purchase order forms, make sure that you use clean, spacious, and well-labeled tables. This ensures that the supplier or vendor can easily read and understand your sales order or request.

Moreover, remember that purchase orders are legally binding business documents. This means that they will be reviewed during company audits and business planning sessions. As official documents, they need to be in the most pristine conditions.

3. Add a Terms & Conditions Section

As mentioned above, purchase orders are legally binding business documents. When creating one, you (the buyer) should be clear on what you expect from the seller. Include the payment terms, contact information, and other stipulations on the lower portion of your purchase order form. By setting these expectations, both you and the seller will be bound to a fair business agreement.

4. Incorporate Your Branding Designs

As a business document, your purchase orders are a perfect avenue for reinforcing your brand’s identity. You can easily do this by adding your own business logo or letterhead designs. Doing so can also help increase the credibility of the printed form.

5. Look Into Electronic Purchase Orders

For total convenience and more tracking functionalities, explore the use of electronic purchase orders or e-procurement and e-purchasing software tools. Quickbooks is a popular invoicing and accounting software that small businesses may use. With an e-procurement system that links to your POS system in place, you will have more time managing other aspects of your business. In addition, you will have real-time access to your order sheets and make corresponding payments to suppliers automatically.

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