What is a Purchase Order used for?

A Purchase Order is the buyer’s official company document that states all of the details of the company’s new order of goods. The buyer will issue a Purchase Order document to the seller, who will then confirm the new order with a Proforma Invoice document.

How to create a Purchase Order

1. Open IncoDocs

   Open IncoDocs in your browser and navigate to the 'Purchase Orders' section.

2. Create a new Purchase Order

   Click on 'Create New' and select the Purchase Order from the dropdown menu.

3. Fill out & customize your doc

   Fill out document info, customize document fields to your needs and add your company letterhead If you use Xero or Quickbooks Online, you can also connect your account and autofill data from purchase orders in your accounting system.

4. Sign & seal

   Click on the signature box at the bottom of your document to create and place a digital signature then hit “Save & Quit”. On the document preview screen, click on the ‘More’ dropdown button and select “Add company seal” to place a digital stamp.

5. Download or share

   Download or share purchase orders from IncoDocs in 1-click. You'll know when the seller have viewed your purchase order so you know when to best follow up.

Create in IncoDocs

Your questions, answered.

How does a Purchase Order work with a Proforma Invoice?

A Proforma Invoice is typically issued by the seller upon receiving a Purchase Order from a buyer. These are important documents that are used to officially confirm all order and product information to avoid any confusion or problems with the supply and delivery of products. Any additional information agreed upon between the buyer and seller can be included on these documents.

Both parties will have to counter-sign each document as they represent a legally binding agreement between the buyer and seller. If there are any disputes relating to the order or supply of goods, these documents will be referred to in a court of law. Read how importers and exporters digitally countersign Proforma Invoices, Purchase Orders and other Sales Contracts

What information is included on a Purchase Order document?

What is the Difference Between a Commercial Invoice and a Purchase Order?

A purchase order is initiated by the buyer to request goods from a supplier, listing items, quantities, agreed prices, and other details like shipping terms and the delivery date. It serves as the buyer’s official offer to purchase goods. On the other hand, a commercial invoice is issued by the supplier after shipping the goods. It acts as a bill to the buyer, detailing the products delivered, their quantities, prices, and the total amount due, including any additional agreed upon expenses such as shipping costs​.

Who Approves Purchase Orders?

Purchase orders are typically approved by a designated authority within the buying organization. This could be a manager or a member of the finance or procurement department. This approval ensures that the purchase aligns with the company's budget and procurement policies, and it often involves verifying the details and availability of funds before the PO is issued​.

Who Prepares the Purchase Order Document?

The purchase order document is usually prepared by the procurement department or the buyer within an organization. This process follows the approval of a purchase requisition, which is a formal request to make a purchase. Templates for purchase orders can be easily created using our tool, and you can download it as a PDF.

How Many Copies of a Purchase Order are Prepared?

Typically, at least three copies of a purchase order are prepared:

These copies ensure that all parties involved have the necessary documentation for tracking and record-keeping purposes​.

Why are Purchase Order Forms Pre-numbered?

Purchase order forms are pre-numbered to facilitate efficient tracking and management of orders. The unique numbering system helps prevent duplicate orders, maintain accurate records, and ensure transparency and accountability in the procurement process. This practice also helps in auditing and resolving any disputes that may arise​.

When is a Purchase Order Issued?

A purchase order is issued after the purchase requisition has been approved. This issuance occurs before the supplier is asked to deliver goods, signifying the buyer's formal agreement to the purchase terms and readiness to proceed with the transaction.

Is this a free Purchase Order Template?

This Purchase Order template is available for free at IncoDocs. You can register for a free account and access the template. Other trade documentation templates are also available at no cost.