A purchase order is a binding contract. This PO template will help you to get it right first time.
Anyone who regularly orders items for their business will know all about purchase orders. The reverse of an invoice, the purchase order is a request to buy items; it indicates the exact type of item, quantity, and agreed prices from external suppliers. If your purchase order is structured correctly, there should be no possibility of confusion.
What is a purchase order?
A purchase order is a binding contract, and as such there are millions of them sent out every day across the world to keep companies working together correctly and efficiently.
When is a PO is used?
A purchase order is raised for a range of purchases, typically:
Services – employing freelancers or external agencies
Large goods – such as printers or photocopiers
What should a PO include?
Providing the item, the item number, the quantity, the method of payment and all addresses and contact details are present, the transaction should progress smoothly. Download our template and get those orders placed.
- PO number
- Supplier details
- Purchaser details
- Payment terms
- PO reference
- Item number (if applicable)
- Quantity (if applicable)
- Price per unit
- Total (ex VAT)
- VAT (if applicable)
- Total net
- Shipping method: Method by which you would like the item delivered (eg road, flight, sea).
- Shipping date: latest date that the buyer expects the items to be delivered by
- Terms: When the invoice for payment has to be made by – eg 30 days after delivery
- Reference: A number, which will be quoted on the invoice accompanying the items when they arrive.
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Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.