Purchase order format

A purchase order (PO) is issued by the buyer. It lists the goods or services wanted, quantities, agreed rates, taxes, delivery date and payment terms. Once the supplier accepts it, it is the reference for the delivery, the supplier's invoice and the payment.

Small shops often order by phone, but a PO pays for itself as soon as a supplier sends the wrong quantity or a different rate: you have it in writing.

A PO also helps with stock planning. Open orders show what is already on the way, so you do not reorder the same goods twice, and comparing the PO, the goods received and the supplier's bill catches short supply and wrong rates before you pay. Ask the supplier to quote the PO number on the invoice so the three papers can be matched later.

When to use it

• Ordering stock from a distributor or company.
• Any order where rate, brand or delivery date matters.
• When the supplier needs a written order before dispatch.
• To compare later what was ordered, received and billed.

A purchase order is a commercial document. It is not covered by the CGST Act or Rules, has no GST effect and is not reported in returns. The tax side starts with the supplier's tax invoice when the goods arrive; that is what you need for input tax credit.

Under contract law, an accepted PO is a contract, so write the rate, quantity, delivery date and payment terms you mean.