By Safock Procurement Research Team8 min read
Order "4 crushed tomatoes" and you might get four cans. The kitchen meant four cases of six, 24 cans for $153.60. The receiver counts four of something, the supplier invoices four of something else, and accounts payable spends a morning working out which is right.
A purchase order is the document every later step is checked against. The driver delivers to its address. The receiver counts against its lines. Accounts payable matches the invoice to its prices. When a field is missing or vague, nothing goes wrong on the day the PO is sent. It goes wrong days later at a loading dock, or weeks later in an exception queue.
A purchase order (PO) is the buyer's written order to a supplier. It comes after any internal request and approval, and before the delivery and the invoice:
A PO also has legal weight. In the US, Article 2 of the Uniform Commercial Code treats "an order or other offer to buy goods for prompt or current shipment" as inviting acceptance, either by a promise to ship or by shipping the goods (UCC § 2-206, Cornell LII). Once the supplier accepts, the PO's terms are part of the deal. Rules differ elsewhere and for services, so treat that as background, not legal advice.
| Field | What it's for | What breaks without it |
|---|---|---|
| PO number | The reference every later document quotes | Invoices can't be matched to the order, and duplicate checks lose their anchor |
| Issue date and required-by date | When the order was placed and when it's needed | Late deliveries can't be measured or enforced |
| Buyer's legal name and bill-to address | Who is buying and where invoices go | Invoices go to the wrong entity or the site instead of accounts payable |
| Supplier and supplier ID | Who is supplying, matched to one supplier record | The same supplier gets set up twice, which is how duplicate payments start |
| Ship-to site and address | Where the goods go | Deliveries go to the default address, often head office |
| Delivery instructions | Receiving hours, dock, access rules, temperature limits | The truck arrives at the wrong time or door and is turned away |
| Item code and description | Exactly what is being bought | Substitutes can't be spotted, and the contract price can't be checked |
| Quantity, order unit and pack size | How many of what | "4" means cans to one person and cases to another |
| Unit price | The agreed price | The invoice has nothing to be matched against, so price creep gets paid |
| Cost centre | Which budget the spend belongs to | Spend lands in a general account and site budgets are wrong |
| Payment and freight terms | When you pay, and who pays for and owns the goods in transit | Early-payment discounts are missed, and freight disputes have no answer |
| Requested by and approved by | Who asked and who had the authority | No evidence the approval limits were followed |
A PO number has to be unique, and it helps if it tells you where the order came from. A site code and a sequence number, such as DTN-0001 for a downtown restaurant, does both. Each site can run its own sequence without colliding with others, and when an invoice quotes AIR-0217, anyone in accounts payable can see it belongs to the airport site.
Sites differ in ways a supplier can't guess. In the PO generator's example, the downtown restaurant receives between 6:00 and 10:00 am at the rear alley door and needs cold-chain items at 41°F or below. The airport site needs drivers escorted airside, booked 24 hours ahead. The campus site takes no deliveries during exam weeks without notice. Put those instructions on the PO, so every order carries them and no driver depends on one manager's memory.
Every line needs an order unit (case, bag, box, each) and, where it isn't obvious, the pack size: how many individual items are in one unit. "4 CS, 6 per case" is unambiguous. "4" is not. The same goes for anything bought by weight or volume.
A single order often feeds more than one budget: food for the kitchen, gloves and sanitizer for supplies. A cost centre on each line puts the spend in the right place on the day the PO is raised, and saves a round of recoding at month end.
The PO generator's example is a restaurant group ordering from its distributor for the downtown site, PO DTN-0001, on 2/10 net 30 terms with freight prepaid to the door.
| Item | Ordered | Pack | Individual items | Unit price | Line total | Cost centre |
|---|---|---|---|---|---|---|
| Crushed tomatoes, #10 can | 4 CS | 6 per case | 24 cans | $38.40 | $153.60 | 5100 Food |
| Extra virgin olive oil, 3 L tin | 2 CS | 4 per case | 8 tins | $112.00 | $224.00 | 5100 Food |
| Tipo 00 flour, 50 lb bag | 6 BG | 1 | 6 bags | $41.75 | $250.50 | 5100 Food |
| Nitrile gloves, large | 2 CS | 10 boxes | 20 boxes | $64.90 | $129.80 | 6200 Supplies |
| Quaternary sanitizer, 1 gal | 1 CS | 4 per case | 4 gallons | $52.30 | $52.30 | 6200 Supplies |
The subtotal is $810.20. Only the gloves and sanitizer are taxable, so sales tax at 8.75% applies to $182.10, adding $15.93, for a total of $826.13.
Two lines of notes on the PO do real work too: "Substitutions require written approval from the purchasing manager" and "Short shipments will be credited at the PO price." When a delivery arrives short or substituted, the receiver and the supplier both know the rule already.
Untick fields to remove them from the PO and see which later step fails, and where. Two are unticked to start: the order unit and pack size, and the payment terms.
Untick a field to see what breaks later
Receiving
Invoice matching
Payment
Free tool
Purchase Order Generator
Save your sites with their delivery instructions, number POs by site automatically, enter lines with pack sizes and cost centres, and download a PDF to send to the supplier, plus a CSV for your records.
Runs in your browser. No sign-up.
The PO generator flags the gaps a supplier or accounts payable team would send back:
After it goes out, the PO keeps working. Ask the supplier to confirm the order, especially the price and delivery date. Record the delivery against it line by line with a goods receiving note. And ask suppliers to quote the PO number on every invoice; the PO invoice generator is a simple thing to point them to.
A document a buyer sends to a supplier to order goods or services, stating what is wanted, how many, at what price, where and when it should be delivered, and on what payment terms. It carries a PO number that the delivery, the goods receipt and the invoice are all matched against.
A unique PO number, the issue date and required-by date, the buyer’s legal name and bill-to address, the supplier, the ship-to site with delivery instructions, and for each line an item code, description, quantity, order unit and pack size, and unit price. Add payment and freight terms, cost centres, and who requested and approved it.
In the US, a purchase order for goods is generally an offer, and it becomes a contract once the supplier accepts it, either by confirming the order or by shipping the goods, under Article 2 of the Uniform Commercial Code. Other countries and services contracts work differently, so check with your counsel for anything significant.
The purchase order comes from the buyer before delivery and says what is being bought and on what terms. The invoice comes from the supplier after delivery and asks for payment. Accounts payable matches the invoice against the PO and the goods receipt before paying.
Use a format that is unique and tells you where the order came from. A site code followed by a sequence number, such as DTN-0001 for a downtown site, lets each site number its own orders without colliding with others, and lets anyone see at a glance which site an invoice belongs to.