Purchase Order Template

One can define a purchase order as a formal intent of the procurement of goods in a written mode by the buyer of the product to the seller. Therefore, the purchase order template is not a legal document but a commercial commitment between the buyer and the seller to procure the goods/services. It shall have detailed information so that the chances of error reduces. Once issued by the purchaser, the same has to be accepted by the seller. After this process is once approved, the seller will send the buyer the final invoice. There are negligible differences between the invoice and the purchase details, and as the final stage, makes the payment.

Companies can design it as per their requirement. However, the generic format has been below:

Part #1 – Name of the Company

The company name that will issue the purchase order must be mentioned here.

Part #2 – Address of the Company

One must mention the address of the company that will issue the purchase order here.

Part #3 – PO Number

PO number will be the requisition number that the purchasing company shall use, and that can start with the number 1 or with different combinations if the company has multiple divisions and wants to identify which department has issued the PO requisition. For Example, if the company is ABC, it has the department say #58, its 350th order, and the month is January, then the PO number could be ABC580035001. ABC will represent the company’s name, and 58 will be the department identification code. Then, one would use the next 5 digits for the order number, and the last 01 would represent the month when that PO  raises.

Part #4 – PO Date

One must mention the PO date here.

Part #5 – ID of the Vendor

The vendor ID to which one will raise the PO requisition needs to mention here.

MIDDLE PART

Part #6 – Name of the Seller

The seller’s name needs to be mentioned here from whom the goods intend to be purchased.

Part #7 – Address of the Seller

The seller’s address needs to be mentioned here from whom the goods intend to be purchased.

Part #8 – Name of the Buyer

One must mention the buyer’s name here, i.e., the person or department where the goods are shipped.

Part #9 – Address of the Buyer

One must mention the buyer’s address, i.e., the shipment details.

Part #10 – Concerned Person

The left side concerned person will be from the seller side, and the right side concerned person will be from the company’s department to whom the seller can connect.

Last Part

Part #11 – Shipping Method

The shipping method is wherein it will mention the mode here.

Part #12 – Payment Terms

Usually, 30 days are mentioned as payment terms or any specific industry-wise credit period.

Part #13 – Date Required

Mentioned the date when the goods are required.

Part #14 – Item Description

Mentioned the goods that are required items.

Part #15 -Quantity / Unit Price / Amount

Enter the quantity that is required and mention the per-unit price. Also, for the amount, multiply the quantity by the unit price.

Part #16 – Approved By

Most companies require that the manager approve the PO, or one would make unnecessary purchases.

Part #17 – Subtotal, Freight, Taxes and Order Total

Subtotal will be the total of amounts entered, and then accordingly, freight will be calculated along with taxes. Finally, one must enter the final total amount.

The procurement department can customize the PO order per their requirements. However, one must enter all the above details to use the PO order. Use this template to place purchase requisitions and use JIT technology, and one can use this template.