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What is a Purchase Order?

Last updated on Nov 30, 2024

A purchase order (PO) is an official document issued by a buyer to a supplier that details the agreed-upon products or services, quantities, prices, and delivery terms.

Purchase Order Workflow

1. Creation

  • Select vendor and enter basic PO information

  • Add items and specify quantities

  • Include delivery expectations and payment terms

  • Review and submit for approval

2. Processing

  • PO gets sent to vendor

  • Vendor confirms order details

  • Track delivery status

  • Monitor order fulfillment

3. Completion

  • Receive and verify goods/services

  • Match PO with received items

  • Convert to bill for payment

  • Close or archive PO

System Navigation

Accessing Purchase Orders

  • Navigate to Purchase section in main dashboard

  • Select Purchase Order tab

  • View comprehensive list of all POs

Overview Dashboard Features

  • Filter POs by status, date, and vendor

  • Sort by amount, date, or PO number

  • View key metrics and pending actions

  • Access quick actions for each PO

Creating and Managing Purchase Orders

Adding New Purchase Orders

  1. Basic Information

    • Vendor selection from approved list

    • PO number (auto-generated or manual)

    • Order date and expected delivery date

    • Payment terms and reference numbers

  2. Item Details

    • Product/service selection

    • Quantity and unit price

    • Tax rates and calculations

    • Account allocation

  3. Additional Information

    • Terms and conditions

    • Special instructions

    • Shipping preferences

    • Notes for internal reference

  4. Summary and Charges

    • Subtotal calculation

    • Apply discounts

    • Tax computation

    • Final amount verification

Status Management

  • Draft: Initial creation phase

  • Sent: Dispatched to vendor

  • Open: Awaiting fulfillment

  • Billed: Converted to invoice

  • Closed: Order completed

Converting Documents

  • PO to Bill conversion

  • Partial billing support

  • Multiple bills from single PO

  • Document linking and tracking

Advanced Features

Document Management

  • Clone existing POs

  • Batch printing options

  • Email integration

  • Document history tracking

Batch Operations

  • Mass status updates

  • Bulk printing

  • Multiple PO approval

  • Batch email sending

Troubleshooting Guide

Common Issues

  1. Required Fields

    • Mandatory field validation

    • Format requirements

    • Data consistency checks

  2. System Access

    • Permission levels

    • User authorization

    • Session management

  3. Data Validation

    • Numerical accuracy

    • Date range verification

    • Vendor information validation

Best Practices

Management Tips

  • Regular status updates

  • Proper documentation

  • Vendor communication

  • Approval workflow adherence

Documentation

  • Maintain audit trail

  • Record changes

  • Document special terms

  • Keep communication records

Important Notes

  • Always verify vendor details before submission

  • Double-check calculations and tax rates

  • Maintain clear communication with vendors

  • Regular backup of important POs

  • Follow company approval hierarchy