What a purchase order should include
- Your business details and a PO number
- The supplier's name and address
- The date of the order and the delivery date
- A clear description, quantity and agreed rate for each item
- The total, and whether tax is included
- Delivery terms and shipping instructions
- Who authorized the purchase, if your business requires approval
Purchase order vs invoice
The buyer issues the purchase order before the goods or services are delivered. The supplier issues the invoice after delivery to request payment. The PO is your commitment to buy; the invoice is their request to be paid. Matching the two is what keeps accounts payable clean.
When a PO is worth the extra step
For a $20 one-off purchase, a PO is overhead. It earns its keep when you need approval before spending, when the order is large enough that a written record matters, when you are buying from a new supplier, or when your accountant needs every cost tied to a document.