What a purchase order should include
A useful PO answers every question a supplier, a warehouse or an accountant may have later. Keep the wording of each item the same as on the supplier's quotation so the documents match line by line.
- Your business name, address and tax ID if you have one
- The supplier's name and address
- A unique PO number and the date
- Each item with quantity, unit price and line total
- Tax, the total and the currency
- Delivery date and delivery address, and payment terms in the notes
- Who prepared and who approved the order
Purchase order, quotation, delivery note and invoice
The documents follow each other. The supplier sends a quotation, you reply with a purchase order, the goods arrive with a delivery note that someone signs, and the supplier then issues an invoice that quotes your PO number. Matching the PO, the signed delivery note and the invoice before paying is the simplest check against paying for goods that never arrived or were charged at the wrong price.
Tips for smaller businesses
Use one numbering series for all POs, for example PO-0001, PO-0002, and never reuse a number. Ask suppliers to quote the PO number on their invoice. Put payment terms such as 30 days after delivery in the notes. If prices include tax, say so. Keep the PDF together with the signed delivery note and the invoice, because together they show what was ordered, received and paid for.