Purchase Orders are used to generate orders for products and services in all industries. This form is often used electronically and ensures you receive the items that you wish to purchase.
A Purchase Order Form (PO) is a hard-copy order for supplies or services that a company sends to a vendor by fax, via website or by some means of electronic transmission. In return, the vendor fulfils and ships the items or delivers the services to the ordering company, even if the company has not yet paid for the order.
The purpose of a PO is to serve as a promise of payment---that is, the ordering company promises to pay the vendor for the items on a PO after the vendor delivers the goods or performs the services. The company and the vendor usually agree on payment terms when they first consent to do business with one another. A PO protects both the ordering company and the vendor by providing a paper trail for both parties. In addition, it provides historical data to both businesses, which allows them to see previous orders and calculate usage.
POs typically contain standard information such as; PO date, company's PO number, vendor name and address, item catalogue number, item description, item quantity to be ordered, item price, extended price (quantity multiplied by item price), sales tax if applicable and PO total (total extended prices and applicable sales tax of all items on the order). The PO may also contain the name and phone number of a company contact person, or buyer, who placed the order.
A Purchase Order Form should be in a simple and easy to read format. Since faxing is a common method of transmitting POs, the PO template needs to be light and in a clear font so that the fax receiver has no problems interpreting the order.
Though Purchase Orders contain relatively similar information, templates vary. Many Purchase Order information systems have their own templates embedded into their software; however, if you do not have PO software, you can either create your own templates, or you can search online (see Resources).