Purchase Order Template

What is a purchase order?

Cambridge Dictionary defines a purchase order as a document that asks a company or person to supply products or services and gives details such as the price and the method and date of payment. The buyer writes it and sends it to the seller. Once the seller accepts, both sides have agreed what is delivered and for how much.

In US federal buying, the Federal Acquisition Regulation calls a government purchase order an offer to buy supplies or services on specified terms and conditions. Between businesses, the PO works the same way: the vendor's acceptance turns it into the order both sides follow.

How do I make a purchase order?

Fill in your company as the buyer, the supplier under Vendor and the delivery address under Ship to. Add each item with its quantity and agreed unit price, then any discount, tax and shipping. Set the delivery date and payment terms, such as Net 30. Download the PDF and send it to the vendor.

1. Type your company at the top of the order.
2. Add the supplier under Vendor and the Ship to address.
3. List the items with quantity and unit price.
4. Set the delivery date and payment terms.
5. Press Download PDF.

What is the difference between a purchase order and an invoice?

The buyer sends a purchase order before delivery to say what they want and at what price. The seller sends an invoice after delivery to ask for payment. A seller can print the buyer's PO number on the invoice, so the buyer can match the two and check that what was billed is what was ordered.

If you are the seller, make the invoice with the Invoice Generator and type the customer's PO number into its PO number box.

How should purchase orders be numbered?

Use one running series, so no two orders share a number and gaps stand out. A prefix with zeros, such as PO-0001, keeps them in order when sorted. Press New purchase order and the tool counts up for you: PO-0041 becomes PO-0042. Keep the PDF of each order you send, filed by number.

How are the totals on a purchase order worked out?

Each line is quantity times unit price. A fixed discount comes off the subtotal, tax is charged on the taxed lines after the discount, and shipping is added last. In our example, the items make $480.46, $25 comes off, 7.5% tax adds $34.16, and $18 shipping brings the order to $507.62.