Purchase Order Template
Orders goods from a supplier at an agreed price, with a delivery date.
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| Order no. | [order no.] |
| Supplier | [supplier] — [supplier address] |
| Deliver to | [delivery address] |
| Required by | [date] |
| Description | Qty | Unit price | Line total |
|---|---|---|---|
| [add one line per item] | |||
| Subtotal | $ 0.00 | ||
| Order total | $ 0.00 | ||
Please quote the order number above on your delivery note and invoice. Goods not matching this order may be returned at your cost.
What is a Purchase Order?
A purchase order is the buyer’s written instruction to a supplier: send these items, at this price, to this address, by this date. It exists so that what was ordered is fixed in writing before anything ships. Without one, the order lives in an email thread or a phone call, the wrong specification arrives, the invoice shows a price nobody agreed, and there is nothing for the finance team to check the invoice against.
Purchase orders are raised by whoever controls spending — an office manager, a site foreman, a procurement team, or the owner of a small business. Once issued, the number follows the order everywhere: the supplier quotes it on the packing slip and the invoice, goods-in quotes it when the delivery arrives, and accounts payable uses it to run a three-way match between the order, the goods received note and the invoice. Many organisations will not pay an invoice that carries no purchase order number, which makes the PO the thing that gets the supplier paid.
The legal effect varies. In most systems a purchase order is an offer that becomes a binding contract when the supplier accepts it or begins performance, but which side’s printed terms govern depends on how the exchange happened and on local contract law — the classic battle of the forms. Practical requirements differ too: an Indian buyer normally shows GSTIN and HSN or SAC codes so the supplier can invoice correctly, a UK or EU buyer may need a VAT number on the order to establish the treatment of a cross-border supply, and public sector buyers often require their own reference codes. Check what yours needs.
A purchase order authorises a spend and creates the paper trail behind it. It does not pay anybody, does not reserve stock, and does not by itself override the supplier’s own terms and conditions. It is not a delivery note and not a receipt for goods — the packing slip and the goods received note do that. And it is only as good as its detail: a PO that fails to state the specification, the unit of measure or the agreed price transfers the argument to a point where the goods are already in your yard.
What to put in a Purchase Order
These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.
| Field | What goes in it |
|---|---|
| Business name | For example: Barton Supply Co. |
| Your address | For example: Unit 7, Barton Road, Columbus, OH 43212 |
| Purchase order no. | For example: PO-2026-0318 |
| Supplier | For example: Northgate Timber Inc. |
| Supplier address | For example: Unit 3, Foster Avenue, Cleveland, OH 44113 |
| Deliver to | For example: Barton Supply Co. |
| Required by | Free text |
| Tax rate % optional | For example: 20 |
| Items ordered | One per line: Description | Qty | Unit price |
How to write a Purchase Order
Number the order and require it back
Give each purchase order a unique number and tell the supplier in writing to quote it on the order acknowledgement, the packing slip and the invoice. That single number is what lets goods-in accept a delivery and accounts payable release a payment without asking anybody. Keep the sequence unbroken so a cancelled order is visible as cancelled rather than simply absent.
Address it to the supplier’s order desk
Send it to the address or inbox the supplier uses for orders, not to a sales representative’s personal email, where it can sit unread through a holiday. Name the supplier’s registered entity and their address, add your supplier account code if you have one, and name a contact on your side with a phone number that a real person answers.
Separate deliver-to from bill-to
The invoice address and the delivery address are frequently different, and assuming they are the same is how pallets arrive at a head office with no loading bay. State the full site address, a named recipient, a mobile number, the hours the site can receive, and any access restriction — tail lift needed, no vehicles over seven metres, deliveries before noon only.
Specify each line down to the part number
Give the manufacturer part number, the specification that matters — size, finish, grade, colour — the unit of measure, the quantity and the agreed unit price. ‘25 mm galvanised elbow, part GE-25, boxes of 10, quantity 4 boxes, 18.50 per box’ can only be filled one way. ‘Pipe fittings, 4’ can be filled several, and one of them will be wrong.
State the required-by date and the terms
Give a calendar date rather than ‘ASAP’, which every supplier reads as convenient. Say whether part deliveries are acceptable or whether the order must ship complete. Set the payment terms, the delivery terms — an Incoterm if the goods cross a border — and the address invoices should be sent to, so the invoice does not go astray after the goods arrive safely.
Common mistakes
- Writing ‘ASAP’ instead of a required-by date, which leaves the delivery date entirely in the supplier’s diary rather than yours.
- Ordering by description with no part number, so a substitute arrives that meets the words on the order but not the job.
- Confusing the unit of measure and ordering ten boxes when you wanted ten pieces, a discrepancy nobody spots until the pallet is unloaded.
- Sending the order to a sales contact’s personal inbox rather than the supplier’s order desk, where it is never entered into their system.
- Leaving the unit price blank because it was agreed on the phone, which lets the supplier invoice at list price and leaves you with no document to argue from.
Frequently asked questions
What is the difference between a purchase order and an invoice?
The buyer creates the purchase order before anything is supplied; the supplier creates the invoice after supplying, to ask for payment. The order says what is wanted, the invoice says what is owed. They should agree line for line, and the point of the purchase order number appearing on the invoice is to let somebody prove that they do before money moves.
Is a purchase order legally binding?
In most systems a purchase order is an offer, and it becomes binding once the supplier accepts it or starts performing. Whose terms then govern the contract depends on the sequence of documents exchanged and on local contract law, so the answer is not identical everywhere. If the order matters, get a written acknowledgement back, and read what the supplier attaches to it before treating the matter as settled.
Who raises a purchase order, the buyer or the seller?
The buyer. The seller’s equivalent documents are the quotation before the order and the sales order or acknowledgement after it. If a supplier sends you something called a purchase order, they are usually sending you their own acknowledgement of yours, or asking you to raise one. Read whose name sits under the words placed by.
Can a purchase order be cancelled?
Sometimes, and it depends on how far the supplier has gone. An order not yet accepted is usually straightforward to withdraw; one already accepted is a contract, and custom-made or already-shipped goods may not be cancellable without a charge. Cancel in writing, quote the order number, and ask for written confirmation, so the cancellation is as documented as the order was.
Do small businesses need purchase orders?
They help wherever more than one person can commit money, or where orders are large enough that a mistaken quantity hurts. For a sole trader buying stationery they are overhead. For anyone buying materials against a job, they give you a fixed price to check the invoice against and a record of what you agreed, which is exactly what is missing when a supplier’s invoice arrives higher than expected.
This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.