Definition
A purchase order (PO) is a buyer's formal, numbered order to a supplier, stating the items, quantities, prices, delivery and payment terms it agrees to buy on.
What is a purchase order used for?
Once the supplier accepts it, the PO becomes the reference for everything that follows: the supplier’s delivery note, your goods received note and the supplier’s invoice should all quote its number. It also commits spend and tells stores what to expect. Changes after issue are usually made as numbered revisions with a reason.
Example: a paint distributor issues PO 2207 for 600 tins at GBP 11.50 each plus tax, for delivery in 10 days.
In the UAE and Saudi Arabia the printed PO is often called a local purchase order, or LPO; see LPO, PO or LPR? Purchasing documents explained.
- Requisition: Approved . Nothing posts.
- RFQ and quotes . Nothing posts.
- Compare and award . Nothing posts.
- Purchase order (PO-2026-0012) . Nothing posts.
- GRN check-in: Checked & approved . Nothing posts.
- Goods receipt report (GRR-2026-0074) . Posts Dr Inventory , Cr GRNI.
- Purchase invoice (PI-2026-0033) . Posts Dr GRNI, VAT , Cr AP.