What this document is
A purchase order is issued by the buyer to formally place an order with a supplier. It states what is being ordered, how many, at what price, and on what delivery and payment terms. When the supplier accepts it, the purchase order becomes the agreed basis for the transaction — a mirror image of a quotation acceptance, but written from the buyer's side.
For small businesses, purchase orders bring order to buying. They give each order a number, tie it to an agreed price, and become the reference that the supplier's delivery note and invoice must match. That three-way match — order, delivery, invoice — is how buyers avoid paying for the wrong goods or the wrong amount.
When to use it
- You are ordering goods or services and want the price and quantity fixed before supply.
- You need a numbered record of each order for your accounts or stock control.
- A supplier asks for a purchase order before they will begin or ship.
- You want the supplier's invoice to be checkable against an agreed order.
When not to use it
- You are the supplier confirming a client's order — use a quotation acceptance or order confirmation.
- The purchase is a one-off small item where a simple receipt is enough.
- The relationship needs a full supply agreement covering warranties and ongoing terms.
Information you will need
- Buyer and supplier names and contact details
- A unique purchase order number and date
- A list of items or services with quantities and agreed unit prices
- The total order value and currency
- Requested delivery date and delivery address
- Payment terms agreed with the supplier
- Any reference to a quotation the order is based on
Clauses included
Buyer and supplier
Identifies who is ordering and who is supplying, with contact details.
PO number and date
A unique reference so the order can be tracked and matched to delivery and invoice.
Items and quantities
Lists exactly what is ordered and how much, at agreed unit prices.
Total and currency
States the total order value so the invoice can be checked against it.
Delivery terms
Sets the delivery date, location, and who bears delivery costs.
Payment terms
Records when and how the supplier will be paid.
Acceptance
Space for the supplier to accept the order, making it binding.
What the guided builder asks
- 1PartiesWho is providing the money?
- 2AmountHow much is being provided?
- 3RepaymentWill it be repaid once or in installments?
- 4InterestWill interest apply?
- 5Late paymentWhat happens if a payment is late?
- 6Additional termsAdditional terms (optional)
- 7ReviewClauses included
- 8ExportExport PDF · Export DOCX
How to sign it
A purchase order is issued by the buyer and becomes binding when the supplier accepts it, by signature, written confirmation, or by beginning to fulfil it. Keep the accepted order with the matching delivery note and invoice.
Send it as a fixed PDF so quantities and prices are not altered after acceptance.
Common mistakes
- Ordering without agreed unit prices, then disputing the invoice total.
- Reusing or skipping PO numbers, which breaks the order-delivery-invoice match.
- Leaving delivery terms vague, so it is unclear who pays shipping or when goods are due.
- Not keeping the supplier's acceptance, so there is no proof they agreed to the order.
- Paying an invoice that does not match the purchase order without checking why.
Frequently asked questions
Is a purchase order a contract?
Once the supplier accepts it, a purchase order generally forms a binding agreement to supply the listed items at the stated prices and terms. Before acceptance, it is an offer to buy.
Who issues the purchase order — buyer or supplier?
The buyer issues it to order from the supplier. If the supplier is confirming an order, that is an order confirmation or quotation acceptance instead.
Why match the invoice to the purchase order?
Matching the order, the delivery note, and the invoice is the simplest way to catch over-charging, wrong quantities, or items you never received before you pay.
Do small businesses really need purchase orders?
For occasional small buys, a receipt is enough. Once you order regularly or in larger amounts, purchase orders bring control and a clear paper trail that saves money and arguments.
Can a purchase order be sent by email?
Yes. A PDF purchase order attached to an email, accepted by the supplier's written reply, is common and effective. Keep both the order and the acceptance.
This template provides general document assistance and is not a substitute for legal advice. Legal requirements vary by jurisdiction, transaction type, and individual circumstances.