Imagine you’re running a business that requires large quantities of raw goods or supplies from a vendor regularly. As the next logical step, you ring up your seller and let them know of your requirements well in advance. But alas, when the goods arrived, you find to your horror that several products are missing and there are gross discrepancies beyond salvage!
Does this abstract situation hit a little too close to home? If that’s the case, it may be time you let purchase orders save the day( and your pockets, for all we care).
So, in this blog post, we go all guns blazing on educating you about them and of course, provide you with different purchase order formats you can download in a click!
What is a Purchase Order Form?
If you’re eyeing a textbook definition of what a purchase order is, here you go-
A purchase order is a commercial document sent by the buyer’s purchasing department to a supplier requesting the product or services in the form of an order. It usually contains the items to be purchased, quantities of each of the items required, and its price, along with the buyer’s and sender’s addresses. Once the vendor accepts the purchase order, you enter into a contract with them.
Having a purchase order form helps you keep track of your purchases, simplifies the process for the vendor, and in the long run, helps your business save money by avoiding inaccuracies.
How Does a Purchase Order Work?
A purchase order (PO) is a document sent from a buyer to a seller, specifying the details of the items or services they wish to purchase. Upon acceptance of the PO, the seller provides the requested items or services at the agreed prices. The buyer then pays the invoice, generated based on the agreed-upon terms in the purchase order.
How to Write a Purchase Order?
A purchase order format usually contains a Purchase Order Number (PO number), PO Date, Name, Address & Contact Details of the buyer and the sender, and a list of products/services to be ordered.
What are the Steps Involved in Creating a Purchase Order?
Once a buyer identifies a need for a product, he/she drafts the purchase order and sends it to the seller for approval. Once the seller receives the purchase order, they review the request and inspect their inventory/availability to see if the order can be fulfilled. If they can fulfill the request, the vendor approves the purchase order, making it legally binding for both parties.
As and when the purchase order has been approved, the seller generates an invoice detailing what goods were provided, the relevant quantity, and the amount owed. Past this, the buyer makes the payment as per the agreed-upon terms.
Different Purchase Order Formats (FREE & Ready-to-use)
So, here are some of the most popular purchase order formats:
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1. Purchase Order Template [Ready-to-use Template]
Alternatively, you can use a purchase order template like this one here and experience hassle-free communication with your suppliers. Add your business logo, apply your style, color, and font and make this free purchase order template all about your brand.
You’re just one click away from trying this purchase order template for FREE!
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We know that purchase order forms are the essence of business transactions and we most certainly believe that it shouldn’t be boring. And you may ask what takes away the boring element in the above purchase order template.
Well, we’ve made it conversational for you. Because Business = People and People = Communication, we believe that communication is smooth when conversational.
2. Purchase Order Format in Excel [Downloadable]
Download this free purchase order format in Excel to fulfill your purchase order requirements. This purchase order template lets you add the buyer’s and sender’s addresses, item ID, items to be ordered, quantity, and price – which automatically gets calculated once you enter the price and quantity of each of the items.
If the purchase order is taxable, there’s a section where you can also add the tax.
3. Purchase Order Format in PDF [Downloadable & Editable]
Did you think we’ll leave PDF out? Oh, come on, it’s the master of all the formats. Here’s an editable purchase order format in PDF that lets you easily add the buyers’ and senders’ details.
Download the PDF file and edit the addresses, purchase order number, item name & Id, quantity, and amount. And poof, you’re ready to go!
What is the Difference Between an Invoice and a Purchase Order?
- A purchase order is sent to the seller by the buyer to order products/services, whereas an invoice is aimed at the buyer by the seller.
- A purchase order contains the complete list of the products/services a seller wants to order, whereas an invoice has all the billing details of the products/services requested by the buyer.
Purchase Order System
A purchase order system is software that manages the entire purchase order activities. More often than not, it automates sending/receiving all purchase orders and invoices while maintaining all the billing details and other paperwork secured.
If you’re a rookie who’s creating a purchase order system from the ground up, here are some tips that’d help you-
- This might come as a no-brainer, but the first step in automating your PO process is to outline all the steps required to make a purchase order from beginning to end.
- The next step would be assigning roles to direct the workflow to completion correctly.
- To perfect your PO system, you’ll have to collect feedback from stakeholders and your internal team actively.
- If you identify specific steps to improve, make the necessary amends and reflect the change in your workflows.
Wrapping up
Using purchase orders for your business isn’t such a Herculean task anymore, thanks to these purchase order templates. We hope you put them to good use and create a thriving business experience.
