GlossaryRetail & Inventory
Purchase Order
Also called: PO
What is Purchase Order?
A purchase order is a document sent to a supplier specifying items, quantities, agreed rates, delivery date and terms. Accepted, it becomes the commercial agreement the delivery and invoice are checked against.
Why Purchase Order matters
Without a PO, disputes come down to memory. It is also the only clean way to catch a supplier billing above the agreed rate, which is common and rarely deliberate.
How Purchase Order works in practice
Raise a numbered PO for anything above a threshold you set, and match the invoice to it before payment. Where rates were negotiated verbally, the PO is what records them.
Frequently asked questions
For regular suppliers and larger values, yes. The discipline pays for itself the first time a rate is billed wrongly.