What is the purpose of a purchase order?


A Purchase Order (PO) is a formal confirmation letter, often sent by the buyer to provider/supplier for the confirmation of the purchase of Goods or Services. It often is followed by a contract from the supplier and it includes specific payment terms as well to prevent issues from happening during purchase. Therefore, it's important to be precise about the details of the order, and mention item codes, specifications, date of delivery, payment terms, item description, specific quality needs, packaging, etc. However, this letter also functions as an agreement between the purchaser and the seller.

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