How to use this purchase order template
- Enter your PO number, the vendor's quote reference and the date you need delivery.
- Your business is the buyer. Add the vendor and, if it's different from your address, a ship-to location.
- List items with the agreed unit prices, add tax and freight, and set your terms.
- Download the PDF, get it signed, and send it to the vendor.
Purchase order vs. invoice
| Purchase order | Invoice | |
|---|---|---|
| Sent by | Buyer | Seller |
| When | Before delivery | After delivery |
| Purpose | Authorizes a purchase | Requests payment |
Numbering and approvals
Give every PO a unique, sequential number, and ask vendors to put it on invoices and packing slips. Even on a small team, set a simple rule, such as anything over $1,000 needs a second approver, and record who authorized it on the PO.
Terms to spell out
- Delivery date and whether partial shipments are accepted
- Who pays freight, and when ownership passes
- Inspection and returns for items that don't match
- Payment terms, such as Net 30 from a correct invoice
- Your right to cancel if delivery is late
When the goods arrive, check them against the PO before approving the vendor's invoice. Record the expense in the expense tracker or your accounting system.