Sample Purchase Order Template
A Purchase Order can be defined as a formal intent of the procurement of goods in a written mode by the buyer of the product to the seller of the product. The Purchase Order template is not a legal document but a commercial commitment between the buyer and the seller to procure the goods/services, and it shall have detailed information so that the chances of error reduces. Once issued by the purchaser, the same has to be accepted by the seller, and after this process that is once approved, the seller will send the buyer the final invoice. There are negligible differences between the invoice and the purchase details, and as the final stage, payment will be made.
Components of Purchase Order Template
Companies can design it as per their requirement; however, the generic format has been discussed below:
Part #1 – Name of the Company
The name of the company that is going to issue the purchase order needs to be mentioned here.
Part #2 – Address of the Company
The address of the company that is going to issue the purchase order needs to be mentioned here.
Part #3 – PO Number
PO number will be the requisition number that shall be used by the purchasing company, and that can start with number 1 or with different combinations if the company has multiple divisions and wants to identify which department has issued the PO requisition. For Example, if the company is ABC, it has the department say #58, its 350th order and month is January, then PO number could be ABC580035001. Here, ABC will represent the name of the company, 58 will be department identification code, and then the next 5 digits would be used for the order number, and last 01 would represent the month when that PO was raised.
Part #4 – PO Date
PO date needs to be mentioned here.
Part #5 – ID of the Vendor
The Vendor ID to which the PO requisition will be raised needs to be mentioned here.
Part #6 – Name of the Seller
The name of the seller needs to be mentioned here from whom the goods are intended to be purchased.
Part #7 – Address of the Seller
The address of the seller needs to be mentioned here from whom the goods are intended to be purchased.
Part #8 – Name of the Buyer
The name of the buyer needs to be mentioned here, i.e., name of the person or particular department where the goods are to be shipped.
Part #9 – Address of the Buyer
The address of the buyer needs to be mentioned here i.e., the shipment details.
Part #10 – Concerned Person
The left side concerned person will be from the seller side, and the right side concerned person will be from the department of the company to whom the seller can connect with.
Part #11 – Shipping Method
Shipping Method wherein the mode will be mentioned here.
Part #12 – Payment Terms
Usually, 30 days are mentioned as payment terms or any specific industry-wise credit period.
Part #13 – Date Required
Mentioned the date when the goods are required.
Part #14 – Item Description
Mentioned the goods that are required items.
Part #15 – Quantity / Unit Price / Amount
Enter the quantity that is required and mentioned the per-unit price. Also, for amount, multiply the quantity by unit price.
Part #16 – Approved By
Most of the companies require that the PO should be approved by the manager else there would be unnecessary purchases made.
Part #17 – Subtotal, Freight, Taxes and Order Total
Subtotal will be the total of amounts entered, and then accordingly, freight will be calculated on the same along with taxes, and the final total amount needs to be entered.
How to Use this Template?
As stated, the PO order can be customized by the procurement department as per their requirements. To use the PO order, one needs to enter all the details that have been discussed above, and this template can then be used to place purchase requisition and can be automated in the system by using JIT technology.
This article has been a guide to the purchase order template. Here we provide you with a free downloadable purchase order template, which is used to document the procurement of goods in a written mode. Also, you can download and use this template in Google Sheets, ODS, or in CSV format.