Overview of a Purchase Order

What is a Purchase Order?

A Purchase Order is a standard document that customers or clients can use to make repeat orders for goods or services from a business.

A Purchase Order is a formal way to record orders made for goods or services and helps ensure that a business is in a position to meet the needs of clients or customers. When a Purchase Order is accepted, a binding contract is formed.

A Purchase Order sets out the delivery address, the number of goods or scope of services, the price, the shipping costs where appropriate, and the payment terms. It also creates a record of orders that can then be matched with invoices.

Key points included

  • Name and address of customer;
  • Delivery name and address;
  • Date of the purchase order;
  • Payment terms;
  • Quantity of goods or description of services;
  • Unit price; and
  • Total price of all the goods or services.

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