Purchase order
PO / PO · Order
A purchase order is a buyer's formal commitment to purchase specified goods or services on stated terms, usually created after the required approvals and linked to a requisition, contract or catalogue.
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Simply put
What it means in ordinary work
It is the instruction to supply and the buyer's commitment. The order should contain the right scope, price, delivery details and terms.
Why it matters
Purchase orders provide control, traceability and a reference for receipts, invoices and payment. Poorly managed orders cause disputes and off-contract spend.
A hypothetical in practice
A hypothetical buyer issues a PO for 200 replacement parts, referencing the contract price, delivery location, acceptance requirements and cost centre. Changes are recorded as formal order amendments.
Common pitfalls
Verbal or email orders can create unauthorised commitments. Direct users to the approved channel.
A PO is not always a contract if a separate agreement exists. Check which terms govern.
Regional lens
How this lands where you work
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As-of date for date-sensitive regional content: 5 November 2026. Read the review policy.