What Is a Purchase Order?

What Is a Purchase Order (PO)?

Purchase order is an official document issued by a buyer to a supplier outlining the details of purchase transactions. It consists of an official request for goods or services, indicating the type, price, delivery time and relevant terms and conditions.

A purchase order is one of the first documents created by procurement function for initiating the buying process. Once both parties sign the document it becomes a a legally binding contract and will be used for future references for settling payments and order fulfilment by both buyers and suppliers.