Purchase Order Format

What is a purchase order?

A purchase order (PO) is the buyer’s written order to a supplier. When the supplier accepts it, it is the contract: the quantities, rates and terms on it are what you will be billed and what you can hold the supplier to.

A PO is a commercial document, not a GST document, so its format is yours to choose. What matters is that your goods receipt and the supplier’s invoice can be checked against it line by line.

What a purchase order must show

• Your company name, billing address and GSTIN, and the delivery address if it differs.
• PO number and date, and the supplier quotation or internal requisition it follows.
• Supplier’s name, address and GSTIN.
• Each item with specification, HSN, quantity, unit and agreed rate; taxes and total.
• Delivery date and place, freight and packing terms.
• Payment terms, inspection and rejection terms, penalties for late delivery if any.
• Approval: who authorised the order.

Requisition, PO, receipt, bill: the three-way match

A clean purchase cycle runs: requisition from the user, quotations from suppliers, a PO to the chosen one, a goods receipt note (GRN) when material arrives, and the supplier’s invoice. Before paying, match the bill to the PO (rate) and the GRN (quantity). That “three-way match” stops paying for short supply or wrong prices.

Common mistakes

• Ordering on the phone and writing the PO later, so the rate is whatever the invoice says.
• No delivery date, which leaves you nothing to enforce.
• Paying invoices without checking them against the PO and the goods receipt.

More free formats and tools

Frequently Asked Questions