A purchase order, or PO, is a document a buyer sends to say 'we want these goods or services at this price'. If you sell to larger organisations, you will meet them often. If you buy for your own business, they are a simple way to stay in control.
What it does
A purchase order is a buyer's formal request to a supplier. It states what is wanted, how many, at what price and on what terms, and it carries a number. When the supplier accepts, the order becomes an agreement that both sides can refer to.
Why clients ask for the PO number
Larger organisations match each invoice against an approved order before paying. If your invoice does not show the PO number, it can be rejected or sit in a queue while someone looks for it. When a client gives you a PO number, put it clearly on your invoice, near the top.
If you are the buyer
Issuing purchase orders helps you control spending and keep records. Write one before you buy: list the items and prices, add delivery details and payment terms, and number it. Our Purchase Order Generator makes a clean document you can save as a PDF and send to your supplier.
What a good PO contains
Check that yours has:
- A unique PO number and the date.
- The buyer's and supplier's names and addresses.
- A clear description of every item or service, with quantity and price.
- Delivery date and place.
- Payment terms, and who to send the invoice to.
PO, quote and invoice together
A typical flow is: you send a quote, the client sends a PO that matches it, you do the work and send an invoice quoting the PO number, and they pay. If any figure differs between those documents, expect delay. Keep them consistent, and tell the client straight away if the price on their PO is wrong.
Keep copies
Keep every PO with its invoice and the delivery record. If there is a dispute about price or what was ordered, the PO is the best evidence of what was agreed.
Tools for this guide
More tips
- What to Put on an Invoice: A Checklist
- Ten Ways to Get Paid Faster as a Freelancer or Small Business
- Invoice Numbers: How to Number Your Invoices Sensibly
- Quote, Estimate, Pro Forma, Invoice: What Is the Difference?
- Payment Terms Explained: Net 30, Due on Receipt and Everything Between
- Credit Notes: When to Use One and How to Write It
- How to Chase a Late Payment Without Damaging the Relationship
- VAT, GST and Sales Tax on Invoices: The Basics
- Hourly, Day Rate or Fixed Price: How to Price Freelance Work
- Keeping Invoice and Receipt Records: What to Keep and for How Long
- Invoicing Clients in Other Countries and Currencies
- Tracking Billable Time So You Never Under-Bill Again
- Your First Invoice: A Calm Guide for New Freelancers
- All tips and guides
These guides are general information to help you get paid and stay organised. They are not legal or tax advice. Rules differ by country and change over time, so check with your tax authority or an adviser.