Purchase Order (PO)
Also known as: PO
A formal document a buyer sends a supplier to order goods at agreed quantities and prices.
A purchase order (PO) is the document a buyer issues to a supplier to request goods, specifying the products, quantities, agreed prices, and delivery terms. Once the supplier accepts it, the PO becomes a binding order.
POs create a paper trail that ties ordering, receiving, and supplier invoices together. When stock is received against a PO, your system can confirm what arrived matches what was ordered and billed.
Automating purchase orders, so they are created when stock hits its reorder point and reconciled automatically on receipt, removes a large source of manual error and delay.
Put it into practice
Related terms
- Reorder PointThe stock level at which you should place a new order so it arrives before you run out.
- Lead TimeThe total time between placing a purchase order and having that stock available to sell.
- SKU (Stock Keeping Unit)A unique internal code that identifies one specific product variant so you can track and reorder it.
Run it in one system
VNDLY tracks stock, orders, and suppliers together so terms like this stop being theory and start being automatic.