Definition
A purchase order, or PO, is a written request from a buyer to a supplier to supply specific goods at an agreed price. Once the supplier accepts it, it becomes the record of what was ordered.
What goes on it
- A PO number, so it can be referred to later
- The date, and the supplier's name and contact
- Each product, quantity and agreed price
- The total and the payment terms
- The delivery address and the date you expect the goods
A worked example
A mini-mart sends this order to its wholesaler:
| Product | Cases | Price per case | Total |
|---|---|---|---|
| Cola 500 ml | 10 | $14.40 | $144.00 |
| Crackers | 6 | $9.00 | $54.00 |
The PO total is $144.00 + $54.00 = $198.00. When the van arrives, the shop checks the delivery against the PO and the supplier's invoice. If only 9 cases of cola arrive, the shortage is caught on the day, with the PO as proof of what was ordered.
Why a small shop should bother
A phone call or message is quick, but it leaves no record. A PO, even a simple one in a notebook or a message with the same fields, prevents arguments over price and quantity, lets you check deliveries properly, and shows what is still on its way so you do not order the same stock twice. The comparison between PO and delivery is the heart of receiving stock.
A PO is not an invoice. The PO is your request, and the invoice is the supplier's bill. Keep the two together for each order.
In Shopkeepa
Shopkeepa does not create or send purchase orders in its first release. The restock list shows what is low with a suggested order quantity, which you can copy into your own PO or message. When goods arrive, record them with Stock In.
Related terms
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