What is a P.O (Purchase order)?

A Purchase Order (P.O) is a legally binding document issued by a buyer to a seller, outlining the details of a proposed transaction for the purchase of goods or services. It serves as an official order confirmation and specifies essential information, including the item or service to be procured, quantity, price, delivery date, payment terms, and any applicable terms and conditions.

Purchase Orders are a fundamental part of the procurement process, facilitating clear communication between the buyer and the seller. They help prevent misunderstandings, disputes, and delays by establishing a formal agreement that both parties can reference and rely on.

Once accepted by the seller, a Purchase Order forms the basis for tracking and managing the procurement process, from order placement to receipt of goods or services and eventual invoicing and payment.