A purchase order (PO) is a document a buyer sends to a vendor to confirm an order for specific goods or services, at an agreed price and on agreed terms. Once the vendor accepts it, the PO is the reference both sides use for the delivery, the invoice and the payment.
Where the PO Fits
The PO sits in the middle of the procurement process:
- Purchase requisition — an internal request to buy.
- Approval — the request is approved according to the company's approval matrix.
- Purchase order — the approved request is issued to a vendor.
- Delivery — goods arrive, usually with a delivery order.
- Invoice and payment — the invoice is checked against the PO and delivery (three-way matching) before payment.
What a Purchase Order Contains
- PO number — a unique reference, used on the delivery order and invoice.
- Date of issue.
- Buyer and vendor details — company names, addresses and contacts.
- Items — description, quantity, unit and unit price for each line.
- Total value — and any taxes or charges that apply.
- Delivery details — site address, required date and any delivery instructions.
- Terms — payment terms and any other conditions.
- Reference — ideally, the project and the requisition it came from.
Why POs Matter
Without a PO, it's hard to prove what was agreed. Disputes about price, quantity or delivery come down to messages and memory. With a PO, the buyer has a clear record of what was ordered, and finance has something to check the invoice against.
The PO is also where many audit trails break. A PO that can't be linked back to an approved request — or forward to a delivery and payment — answers what was ordered, but not who authorised it or whether it was received.
In Bilaro, approved requests become structured POs issued to vendors from a shared vendor register, and each PO stays linked to its requisition, approval and settlement on one audit trail. See how a full purchase order system works end to end.
What is a purchase order?
A purchase order is a document sent by a buyer to a vendor to confirm an order for specific goods or services, at an agreed price and terms. It becomes the reference for the delivery, invoice and payment.
Is a purchase order the same as an invoice?
No. The buyer issues the purchase order before the goods are supplied. The vendor issues the invoice afterwards to request payment. The invoice should be checked against the PO before it's paid.
Who approves a purchase order?
It depends on the company's approval rules. Typically, the approver is determined by the value of the purchase and sometimes its category or project — for example, a project manager for mid-value purchases and a director for large ones.