What goes on a purchase order, and why each part matters

A PO is a contractual document

Once your supplier accepts it, a purchase order forms a contract on the terms it states. That is why the detail matters: the PO is usually the only written record of what was agreed, and if it is vague, so is the agreement.

The parts that must be there

Miss one of these and the order will come back to you, or the invoice will not match.

• A unique PO number, which everything downstream is matched on
• The date the order was raised
• Who is buying: your legal entity, not a trading name, and where to invoice
• Who is supplying, and their quote reference if there is one
• Each line: description, part or catalogue number, quantity, unit price, line total
• Delivery address, which is very often not the invoice address
• The date or window you need it by
• Payment terms, so nobody has to assume
• Who authorised it

Delivery address versus invoice address

The most common practical error. Goods to site, invoice to the office. Where a PO shows only one address, deliveries end up at an office nobody can unload at, or an invoice goes to a site hut and turns up two months later marked overdue.

Reference the supplier's quote

If they quoted, put the quote reference on the PO. It ties the price you are ordering at to the price they offered, and it settles almost every pricing argument before it starts.

Say what your terms are

If you do nothing, the supplier's terms usually govern, because their acknowledgement is the last document in the chain. Stating on the PO that your terms apply is a single line, and it is the whole of what people call the battle of the forms.