Purchase order template for businesses worldwide

Purchase order template for businesses worldwide

What is a purchase order?

Purchase orders are used to put in orders with a supplier. The PO is essentially a list of what you want to buy, including products and services, quantity, price, delivery date, and suggested payment terms.

If the supplier agrees to the terms of the PO, they sign it and the sale proceeds.

The PO sets clear guidelines so that both you and the supplier know what to expect and have something to refer back to.

What is a purchase order?
Good reasons to use a purchase order

There are many reasons to use a purchase order, for example:

  • Simplify the ordering process, ensuring everyone is on the same page
  • Order goods and services without having to pay in advance.
  • Track purchases. A unique purchase order is used throughout the purchase, all the way from the PO to the invoice and payment stage.
  • Reduce misunderstandings and errors by outlining all the terms in advance.
  • Keep an overview of what you’re spending. You can use the information from your purchase orders to create budgets and figure out if you need to cut costs.
  • Ensure that you have funds in place before purchasing something. This will help you manage cash flow.
Good reasons to use a purchase order

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Purchase order Word template

A purchase order made using a purchase order template

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Purchase order Excel template

A purchase order made using a purchase order template

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When to use a purchase order template?

This is a typical scenario where you would use a purchase order template:

  • You own a shop and notice you’re low on inventory
  • You create a purchase order that lists what items need from your supplier, and what price you’re willing to pay
  • The supplier says yes if they have the items and agree to the terms. They might say no if they’re out of stock, the items have been discontinued, or if they want to negotiate the terms or the price.
  • Once the PO has been approved, the supplier fulfills the order and delivers the items, marked with the PO number.
  • After you’ve received the items, the supplier will send you an invoice to request payment. The invoice will have the purchase order number on it.
  • Finally, you’ll pay the invoice.
When to use a purchase order template?
What are the different types of purchase orders?

There are different types of purchase orders:

  • A standard purchase order is used for one-time purchases.
  • A planned purchase order is used internally to get stakeholders to sign off on the PO before it’s sent to the supplier. Once the planned PO is approved, it’s converted into a standard purchase order.
  • A blanket purchase order, also called a standing order, is used for recurring purchases. This is common when you have a long-term agreement or contract with a supplier. With a blanket PO you don’t have to negotiate each purchase.
  • A contract purchase order is used for projects and ongoing services. They outline terms, conditions, and the scope of the work.
What are the different types of purchase orders?

Example of an purchase order and a final invoice

An example of a purchase order

– Created by you
– Created before the purchase
– Lists the goods and services you need
– Includes proposed payment details

An example of an invoice attached to a purchase order

– Created by the seller
– Created after the purchase has happened
– Confirms which goods or services were delivered
– Requests payment and includes payment terms

Why you should use the free purchase order template

Easy to use

Work out all the details beforehand with this easy-to-use purchase order template. Avoid confusion and disagreements.

Save time

Download the template and create a purchase order in a few minutes. Spend less time on admin.

Avoid errors

Give suppliers a professional impression: With this ready-made template you won’t forget any important details.

FAQ

Frequently asked questions about purchase orders

What is a purchase order and how does it work?

A purchase order can be considered a backwards invoice. You send a purchase order to a supplier when you want to buy something. If they agree to the order and the terms, they accept the PO and provide the goods or services.

Afterwards, you’ll receive an invoice from the supplier marked with the PO number.

There are many reasons companies use POs: It lays out all the terms in advance to avoid confusion, it ensures that you have internal approval and the necessary funds before placing an order, they can also be used to track spending and create budgets and so on.

Download a free PO template now.

What is a purchase order vs. invoice?

A purchase order and an invoice are both sales documents, but they serve different purposes.

A purchase order is sent from the buyer to the seller, to request goods and services at a certain rate, with certain terms. If the supplier approves the invoice, they’ll provide the goods and services and then invoice the buyer afterwards.

An invoice is sent from the seller to the buyer to document the sale and to request payment. The invoice has a lot of the same information as the PO, but it also includes payment terms and instructions. The invoice should have the PO number clearly displayed, to refer back to the purchase order.

What does a PO do?

A PO outlines the terms of a sale before the sale takes place. As a buyer, the PO helps you request exactly what you need from the supplier, at prices and terms you’re comfortable with. If the supplier agrees, they approve the PO and proceed with the sale.

Having a PO gives you both something to refer back to in case of confusion or disputes. It also helps you track your spending, and ensure that you have internal approval and necessary funds before placing an order.

How do you write a simple purchase order?

You can create your own purchase order in Word or Excel, or you can download a free purchase order template. Once you download the template, simply fill out the fields and send it to your supplier for approval.

Does Excel have a PO template?

You can download free Excel purchase order templates online. You can also make your own if you have very specific requirements, however it’s probably easiest to customize an existing template.

Download a free purchase order template now.

How do you make your own PO?

You can make your own PO in several programmes, for example Word or Excel. What you choose, depends on what you’re more comfortable working in. Remember to include all the PO essentials—that’s one of the benefits of using a purchase order, rather than your supplier’s order form—you get to include all the details you need.

You can also download a free purchase order template and adjust it to meet your needs.

Can you make your own purchase order?

Yes, a purchase order can be as simple or complicated as you require. While Excel and Word don’t have their own built in purchase order templates, you can download a free purchase order template for Excel or Word in order to get started!

At the minimum the purchase order should include your details, the supplier’s details, the goods or services you want to purchase—along with unit price, quantity, discount and tax rate—and the total amount.

You can also include suggested delivery terms and payment terms, such as due date, payment method and so on.

Purchase order versus order form

When you want to buy something, you can create your own purchase order and tailor it to your needs.

You can also make an order using your supplier or vendor’s order form, but that means you’ll be placing the order on their terms. Their order form might not take into account all your requirements.

However, you should communicate with the vendor or supplier to find a solution that works for the both of you.

What is a PO number?

A purchase order number is a unique number assigned to a purchase order. The PO number should also be included on all the sales documents related to the purchase.

The PO numbers helps you track and manage the purchase throughout your accounting, and also from purchase order to delivery note, to the final invoice. The PO number also helps you quickly. see what’s been paid and what hasn’t.

The PO number can also be used to pull all the relevant sales documents from your records in case of confusions or disputes with the supplier.

What does a purchase order look like?

A purchase order looks a lot like an invoice. The difference it’s that it’s been sent from the buyer to the seller, rather than the other way around.

The PO should have your information, the supplier’s information, a list of the goods and services along with their unit price and quantity. Finally, it should include information about tax, discounts and total amount.

You can also include suggested delivery terms, deadlines and payment terms.

Why do companies use purchase orders?

Purchase orders lay out all the details of the sale beforehand. This ensures that you and your supplier are on the same page and avoids misunderstandings and confusion later. You can also use purchase orders to get internal approval and to ensure you have the funds in place before you order something.

Purchase orders also help you track purchases from start to finish, and to manage your bookkeeping.

They also help you see what you’re spending money on and to create budgets for your purchases going forward.

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