How to Write a Purchase Order

A purchase order, or PO, is a document a buyer sends to a supplier to confirm what they want to buy, in what quantity, at what price and on what terms. Once the supplier accepts it, it usually forms the core of a binding agreement. A clear PO prevents misunderstandings about quantities, prices and delivery, speeds up invoicing, and gives both sides a reference if something goes wrong.

This guide explains what a PO is for, what to include, how to structure it, and a text-based purchase order template you can adapt. Contract law varies by country, so for large or complex deals, have a lawyer review your standard terms.

What a purchase order does

Authorises a purchase. It shows that an authorised person within the buyer’s company approved the spend.
Specifies the order. Items, quantities, price, delivery and conditions are set out in writing.
Creates a reference number. The PO number links the quote, delivery note, invoice and payment.
Supports three-way matching. Many finance teams match the PO, the goods receipt and the supplier invoice before paying.
Provides evidence. If there is a dispute about what was ordered, the PO is a key document.

A PO is not the same as a quote (the supplier’s offer), an order confirmation (the supplier’s acceptance) or an invoice (the request for payment), though they work together.

The fields every purchase order needs

Header information

Buyer’s legal name, address and contact details
Supplier’s legal name, address and contact
PO number, unique and sequential
PO date
Reference to quote or previous agreement, if any
Buyer’s contact person and department or cost centre

Line items

For each item:

Item number or SKU (yours and the supplier’s, if different)
Description, with specification, model, size, colour, material and standards
Quantity and unit of measure (pieces, kilograms, cartons)
Unit price and currency
Line total
Requested delivery date per line, if they differ

Totals

Subtotal
Discounts, if agreed
Freight and handling, if charged separately
Taxes, such as sales tax or VAT, or a statement of how tax is treated
Total order value and currency

Delivery details

Delivery address (and a separate billing address, if different)
Delivery date or window
Trade term, such as FCA or DAP with the named place and Incoterms edition (see Incoterms explained in plain English)
Carrier or freight instructions, if the buyer controls shipping
Packaging and labelling requirements
Partial shipment policy: allowed or not

Payment terms

Payment due date or terms, for example net 30 days from invoice date
Accepted payment method and bank details process (see the security note below)
Early payment discount, if any
Late payment terms if agreed

Quality and acceptance

Reference to specifications, drawings or samples
Inspection rights and timing
Acceptance criteria and procedure for rejecting goods
Warranty requirements

Legal and general terms

Governing law and dispute resolution
Confidentiality, if relevant
Intellectual property terms
Cancellation and change policy
Reference to the buyer’s standard terms and conditions
Force majeure
Limitation of liability, as advised

Authorisation

Name, title and signature (or approved electronic authorisation) of the person issuing the PO
Instructions for the supplier to confirm acceptance in writing, quoting the PO number

A simple purchase order template (text format)

You can paste this into a document or spreadsheet and adapt it.

PURCHASE ORDER

PO number: [CẦN ĐIỀN]
PO date: [CẦN ĐIỀN]
Quote reference: [CẦN ĐIỀN]

BUYER
Company: [legal name]
Address: [address]
Contact: [name, email, phone]
Cost centre / department: [if used]

SUPPLIER
Company: [legal name]
Address: [address]
Contact: [name, email]

SHIP TO
[delivery address and contact]

BILL TO
[invoice address and email]

ITEMS
Line | Item code | Description / specification | Qty | Unit | Unit price | Line total | Requested delivery
1 | | | | | | |
2 | | | | | | |

Subtotal:
Discount:
Freight:
Tax:
TOTAL (currency):

DELIVERY TERMS
Incoterms 2020: [rule + named place]
Carrier / instructions:
Partial shipments: [allowed / not allowed]
Packaging and labelling:

PAYMENT TERMS
[e.g. Net 30 days from invoice date]
Bank details: as shown on supplier's invoice, verified by phone before payment

QUALITY AND ACCEPTANCE
Specification reference:
Inspection:
Warranty:

OTHER TERMS
Governing law:
Buyer's standard terms apply: [yes/no, reference]

AUTHORISED BY
Name / title / signature / date

SUPPLIER ACCEPTANCE
Please sign and return, or confirm by email quoting the PO number.

Step-by-step: writing a PO

Start from an agreed quote or negotiation. The PO should reflect what you’ve agreed, not introduce surprises.
Assign a unique PO number. Use a consistent numbering system.
Fill in complete legal details for both parties. Use the supplier’s registered name.
List every item precisely. If specifications are long, reference an attached document and version number.
Check the arithmetic. Quantity × unit price, taxes and totals.
State delivery terms clearly. Include the place, date and responsible parties.
Define payment terms. Don’t leave them to be implied.
Add acceptance and quality conditions.
Obtain internal approval. Follow your company’s spending authority limits.
Send the PO and request written acknowledgement.
File it with the related quote, confirmation, delivery note and invoice.

Handling changes and cancellations

Changes happen. Use a PO amendment that references the original PO number, states what changes, and is acknowledged by the supplier. Avoid informal changes by phone or chat. State in your terms when and how orders can be cancelled and whether the supplier can charge for work already started.

Tips for buyers

Be specific. Ambiguous descriptions cause wrong deliveries.
Match the quote. If your PO differs from the quote, highlight the changes.
Set realistic dates. Check lead times first.
Include your PO number on delivery paperwork and invoices. Ask the supplier to do the same.
Keep records. Retention requirements vary by country.

Tips for sellers receiving a PO

Review it carefully before accepting; check price, quantities, delivery date and terms.
Flag discrepancies promptly in writing.
Be aware that buyer terms may conflict with your own sales terms. Clarify which prevails.
Confirm acceptance with an order confirmation.

Payment fraud awareness

Fraudsters sometimes impersonate suppliers or buyers and send altered bank details or fake POs. To protect yourself:

Verify any change in bank details by calling a known number, not one in the new message.
Check that the sender’s email domain matches the real company.
Be wary of unusually large first orders from unknown buyers with pressure to ship quickly.
Use approval workflows for new vendors and changes to vendor data.

How to Negotiate Payment Terms With Suppliers
B2B Trading Guide: How Wholesale Deals Work

Frequently asked questions

Is a purchase order legally binding?
Generally, once the supplier accepts it, it forms a contract on its terms, but the rules differ by jurisdiction. Seek legal advice for significant orders.

What’s the difference between a purchase order and an invoice?
A PO is issued by the buyer to order goods or services. An invoice is issued by the seller to request payment.

Do I need a PO for small purchases?
Many companies set a threshold. Even for small orders, a simple PO helps control spending and avoid disputes.

Who issues the PO number?
The buyer. The supplier should quote it on all related documents.

Conclusion

A good purchase order is complete, specific and consistent with what was agreed. Include the parties, items, prices, delivery and payment terms, quality conditions and authorisation, keep a numbered record, handle changes through amendments, and verify payment details independently. With a reusable template, writing a PO becomes quick and routine.