What Is A Purchase Order?

A Purchase Order or a PO is a business-related document which is issued by a purchaser to a seller, denoting the kind, amounts and agreed upon costs for the product or service which the seller is offering to the purchaser. Forwarding a purchase order to a supplier consists of an officially authorized offer to purchase products or services. The approval of a purchase order by a manufacturer or seller generally creates a one off agreement amongst the purchaser and manufacturer so in actuality; no contract is in existence till one accepts the purchase order. A purchase order also generally identifies extra clauses like the terms of payment, freight responsibility, the date on which the product must be delivered etc.

A typical purchase order generally includes of a serial number, a billing and shipping address, terms of payment, and an inventory of the products or service along with amounts and costs.