Blog · Purchase order basics
How to write a purchase order
A purchase order is your written offer to buy: who is buying, from whom, exactly what, at what price, delivered where and when, and on what payment terms. Write it from the supplier’s quote, give it a unique number, send it as a PDF by email, and if anything changes afterwards, issue a revision rather than editing the original.
What a purchase order needs
Each field on a purchase order answers a question that the supplier, whoever receives the delivery or your accounts team would otherwise have to ask. Leave one out and someone writes back, or guesses.
- Your legal name and address. The registered name of the business that is buying, not a trading name or a department. If you are VAT registered, add your VAT number.
- The supplier. Their legal name and address, as they appear on the quote.
- A unique PO number. One number per order, never reused, so every later email and invoice can point to it.
- The date you issue the order.
- Delivery address and date. Where the goods go or the work happens, and when you need it. If you have several sites, name the one.
- Each line. A description the supplier will recognise, the quantity, the unit price and the line total.
- Totals. The total excluding tax, the tax, and the total including tax.
- Payment terms. For example, 30 days from the end of the month of invoice, as agreed with the supplier.
- The supplier’s quote reference, so both sides know which offer this order accepts.
- A contact on your side for questions about the order, with an email address or phone number.
Write it from the supplier’s quote
Work from the quote line by line, not from memory, so the order and the quote agree before anything goes out.
- Check the quote is current. Note its reference and the date it expires. If it has lapsed, ask the supplier to confirm the prices or send a new one.
- Get the purchase approved before you write the order. A purchase order commits the business, so the person with authority to spend that amount should say yes first.
- Take the next number from your sequence and date the order.
- Fill in your legal name, address and VAT number, then the supplier’s details exactly as they appear on the quote.
- Copy each line from the quote: the supplier’s description or item code, the quantity and the unit price. Work out each line total and check it against theirs.
- Add the total excluding tax, the tax, and the total including tax. If your figures differ from the quote, find out why before you send.
- Add the delivery address, the date you need it by, the payment terms and the quote reference.
- Put your name and contact details on the order, then read it once more against the quote.
Send it as a PDF by email
Send the order as a PDF attached to an email, not as an editable document or a few lines in the body of a message. A PDF looks the same on every screen, prints cleanly, and can’t be changed by accident on either side.
Put the PO number in the subject line, for example “Purchase order PO-01042 from Acme Engineering”. Suppliers file orders by it, and their invoice is more likely to quote it back. Send it to the person who sent the quote, and keep a copy with the request it came from.
Ask the supplier to confirm they have it and can meet the delivery date.
When something changes
Prices move, quantities change, a delivery date slips. When that happens, don’t quietly edit the PDF you already sent. The supplier may already be working from the first version, and later nobody can tell which one was agreed.
Issue a revision instead: the same PO number with a revision marker, such as PO-01042 rev 2, a note of what changed, and the new date. If the new total is higher than the amount that was approved, get it approved again before you send it. If the order is no longer needed, cancel it in writing, so the supplier stops work and doesn’t invoice for it.
Checklist before you send
Check each field before the order goes out.
| Field | Why it matters |
|---|---|
| Your legal name, address and VAT number | The supplier invoices the right entity, with the details your accounts team needs. |
| Supplier name and address | The order reaches the business that quoted, not a similarly named one. |
| Unique PO number | Every email, delivery note and invoice can point to one order. |
| Date | Shows when the offer was made and which quote was current. |
| Delivery address and date | Goods arrive at the right site, when they are needed. |
| Lines: description, quantity, unit price, line total | Both sides agree what was ordered and what each part costs. |
| Totals excluding tax, tax and including tax | The invoice can be checked against the order, figure by figure. |
| Payment terms | Nobody is surprised by when payment is due. |
| Supplier’s quote reference | Ties the order to the offer it accepts. |
| Your contact | The supplier knows who to ask instead of guessing. |
Questions
Is a purchase order legally binding?
A purchase order is an offer to buy. Once the supplier accepts it, in writing or by starting the work, it usually forms a contract on the terms it states. Check with a legal adviser if a lot rides on it.
Does a purchase order need my VAT number?
If you are VAT registered, include it. The supplier needs your details to issue a correct tax invoice, and in South Africa SARS’s requirements for a tax invoice commonly include the buyer’s VAT number where the buyer is a vendor. Confirm what your business needs with your accountant.
What is the difference between a purchase order and an invoice?
You send the purchase order before the supplier does the work, to say what you will buy and at what price. The supplier sends the invoice afterwards, to ask to be paid. Comparing the two is how you check you are billed for what you ordered.
Can I write a purchase order without a quote?
Yes, for a repeat purchase from a price list or a small standard item. Use a price you have in writing, such as a catalogue or the last invoice, and say where it came from on the order. For anything new or large, ask for a quote first.
Who should sign off a purchase order?
Someone with the authority to commit that amount, usually set by an approval limit. The person who raised the request shouldn’t be the one who approves it.