Purchase Order

What is a Purchase Order

Purchase order is a document that requests and authorizes a purchase transaction. It contains the description, quantity, price, discounts, payment terms, required date and the other relevant essential information.

Importance of purchase order

Purchase order is very important to track the purchases. It helps in getting the accurate information of purchases made and helps to avoid duplication.

-       If the supplier has changed the price between the date of order and date of delivery, purchase order serves as an evident document for the agreed price between both the parties and clears up any miscommunication on the present price for the same product.

-       Purchase order number mentioned on the invoice helps in avoiding the confusion if repeated orders are made for similar products

-       Purchase orders clearly communicates all the details of the purchase. By having all the details clarified and documented, the potential conflict or confusion in the future is avoided.