40+ Free Purchase Order Templates (Forms) | Excel, Word, PDF

 A Purchase Order Template is a layout that helps companies to create and issue a purchase order efficiently.

A purchase order template has a pattern that includes basic components such as goods tracking number, seller’s information, types of items purchased, billing and shipping address, terms of payments, etc.

The template gives the company a strict guide to draw up their purchase order without leaving anything out.

 A purchase order is a legal document that a buyer sends to a seller of goods or services. It contains a detailed description of the items and the quantity they want to purchase. This document also includes the price of all the goods the buyer has listed and is essential to ensure optimal service exchange.

These two terms are quite common and often confused and it is wise to be aware of the different business terms. Purchase order focus on what is expected of the supplier when it comes to goods and services. It is important to maintain a strong relationship between the buyer and supplier and for that purpose, there should be something, which is legally valid such that it clarifies any sort of confusion on the part of the buyer or the seller. A buyer initiates the purchase order and sends it to the seller. Buyer let the supplier know of his or her intention and planning about the buying of certain items. A purchase order would contain information on the list of the products, which the buyer needs. It could also be about service. Furthermore, the purchase order would also include information on the price and quantity, which the buyer intends to buy. Both parties have to agree on the terms and thus, it would become a legally binding contract for the buyer and the seller.

On the other hand, an invoice is initiated by the seller to the buyer and provides a summary of the various goods or services purchased by the buyer. The invoice can be sent when there is an agreement on the purchase order and usually invoice is sent when goods are agreed upon. It can be sent when payment is sent and in freelancing, the invoice is sometimes sent by freelancer after completion and delivery of the work. There is a mentioned due date. It is also possible that an individual would prefer to have a portion upfront before sending the final invoice. Invoice is also legally binding and the buyer would thus have to pay the seller for the services or goods.

 A purchase order is a legal document held in court. Hence, there is a set format for creating this document, and errors in creating this document may be costly. Therefore, a purchase order serves as a guide to anyone drawing up a purchase order and aids in creating an accurate legal document for efficiency in business transactions.

Some benefits of making a purchase order include:

• The use of a purchase order as a legal document that can serve as a written witness in court if the need arises
•  It is a medium that ensures that the buyer is well aware of changes in the price of the goods they want to purchase and that there is adequate and clear communication between both parties without misconception. Therefore, to proceed with any transactions, both parties must agree to the purchase terms and the prices of the goods or services outlined in the purchase order.
• It helps the supplying company keep track of the orders they have received from clients and leads to the smooth running of business transactions. This allows companies to avoid mistakes in their orders and choose the best sellers in the business market.
• It prevents companies from duplicating their orders and helps check fraudulent activities by providing a detailed account of purchases and expenditures for internal and external audits.
• A purchase order allows for the pre-ordering of goods before the company needs them. This improves the company’s efficiency and allows the seller ample time to ensure that they can supply the items in the purchase order.
• The purchase order can also serve as a receipt for the items that the seller supplied.

Purchase Order (PO) Templates (Word)

The purchase order choice depends mainly on the buyer’s preference, availability of goods or services. Although the types of purchase orders differ in the information present, the buyer can obtain satisfactory service from any of them.

Contract purchase order

This is the most formal purchase order type. A contract purchase order requires both buyer and seller to sign an agreement before issuing the purchase order, referencing the legal arrangement. This form of purchase order comes in handy when the buyer does not have a definite delivery date in mind; both parties will agree on the terms and conditions of the transaction but will make decisions on the quantity and items in the future.

A contract purchase order is typically a binding contract that says a buyer will purchase goods from the seller in the future. Usually, both parties agree a year advance, and during this period, the buyer can make specifications for the order, including essential details for each item.

For example, if a small business orders for the supplies of computers, it must sign a contract that defines the items, quantity, prices, and date of collection. This contract will precede the issuance of a standard purchase order. Thus, both the seller and buyer of the items will be under a legal contract, making the business deal productive and easy.

Standard purchase order

This purchase order type is the most common and is the usual purchase option for one-time purchases.

Here, the buyer gives details of the items they want to purchase, the number of items, pricing, and the exact delivery date. A standard purchase order also includes the payment system, which gives the seller clarity and ensures no miscommunication between the seller and the buyer.

You can make a standard purchase order for various functions depending on your preferences and needs. For example, a stock purchase order will be suitable for consignment, services, or subcontracting. On the other hand, a gift store might make a standard purchase order for a new set of wooden racks or show glasses. If everything goes well and the seller supplies the exact item specification, the purchase order’s closure and the transaction is complete.

Blanket purchase order

A blanket purchase order allows the buyer to order multiple items at once to negotiate a discount. This is most efficient in retail business and increases the profit gained on goods and services. This type of purchase order allows the buyer to outline the number of items and item specifications needed and may or may not include the prices of the items on the list.

If the buyer indicates the price, they may also include the discounts that the seller offers. For example, the buyer may decide to buy 100 packs of gift bags but may not be certain when they require the order’s delivery. In the event of this, the buyer issues to blanket order to begin the process of purchase.

Planned purchase order

A buyer places a planned purchase order to anticipate future needs and puts the demand for items before an actual need for such things. In this type of purchase order, the buyer states details such as the pricing and quality of the items. However, the quantity may be an estimate, and the buyer would likely set an estimated delivery date.

For example:

If the buyer is running low on gift bags but is not yet out, this purchase order allows the buyer to request the supply of gift bags at a flexible delivery date.

Purchase Request Forms (Word)

Purchase Request Forms (Excel)

There are a few specific components that must be present on a purchase order.

Every standard purchase order should include the following details as a necessity:

• The issuing date of the purchase order: This is essential for referencing and documentation of the purchase order. It is also helpful during auditing of the business finances.
• The company logo
• Point of contact information
• The billing address and the contact name of both the buyer and the seller and includes fax, email addresses, and telephone contacts
• Details of services provided which include the unit price, SKU, good description, quantity, etc.
• purchase order number
• Item number
• The shipping method, business terms, and delivery dates of goods and services
• Discounts and line totals
• Transaction terms and conditions

There is no hard and fast rule for the layout of a purchase order.

However, the purchase order can take the following format:

• Header: A header is required in the purchase order, as this allows for the provision of general company information, which includes the company name and address, number of each item, and date of purchase order.
• Information of the supplier: It describes the recipient of the purchase order and must clearly state the contact name and vendor or seller address.
• Ship to: Covers shipping information which includes the shipping method, date of sound delivery, place of shipment, and terms of shipment.
• Order details: This describes every item on the purchase order and provides the item name and description and a line code and quantity. It also includes the price of one of each item, the number of units requested, and the delivery date of each item on the purchase order.
• Summary: Complete the purchase order form by stating the subtotal and discounts, shipping costs, taxes incurred, and the total items purchased.

Purchase Order Format Templates

The purchase is a means of attaining efficiency in your work output and gaining optimal client satisfaction. However, a slow purchase order process is terrible for business, especially if your methods are manual and archaic.

Hence, the purchase order process is the trail of a purchase order from its creation to sales closure. It journeys through order approval, order dispatch and delivery, invoicing, and closure, including quality checks, contract management, and budget checks.

This step-wise approach is helpful to understand the procedure of a purchase order:

Choice of items to purchase

You as the buyer identify a need that the seller’s product can fulfill before placing an order. The buyer needs to determine the number of goods they need and propose a date for delivery when possible.

For example:

If you need to order new gift bags to package your customer goods, first calculate the number of packs you will require and then pre-order in anticipation that you will need a delivery of these items. You must be sure to determine the exact quantity of goods that you will need to avoid cost multiplicity.

You can create purchase orders afresh, especially in the case of recurring or piggybank purchases, but also, as in most cases, you can create a purchase order from purchase requisitions that have undergone approval. Here, the stakeholders are the administrative staff and the procurement team. The stakeholders involved in the choice of items to purchase consist of the administrative staff, requisitioner, sign-off authority, and procurement team. They will need to approve all purchase orders and process the payment.

Choose a vendor

The vendor should be the best source of the items on the purchase order and should be able to fulfill all the terms that you have listed on your purchase order.

Send the purchase order to the seller

After filling in the above information, the buyer should send the purchase order to the seller or vendor for approval and consent. The available modes include cloud storage, fax, email, and paper. There must be sign-off authorization, ensuring that the stakeholders (procurement officers, sine-off authority, requisitioner, and finance team) make necessary last-minute corrections. The buyer must also state the time interval for support to ensure that the process is timely. The license should get to the buyer in time to prevent delays in delivery time. Usually, the response gets to the buyer in time to make arrangements for the delivery of the goods or seek an alternative source if the seller cannot meet the demands in the purchase order.

Purchase order approval

Once the vendor or seller approves the purchase order, they are under a legally binding contract that effectively resolves legal disputes between both parties.

For a company that supplies the gift bags to ascertain that they can provide the said items in time and meet all your requirements, they must review their inventory and verify the effectiveness of their delivery system. Then, if everything is in order, they can approve your purchase order.

The binding contract

In a mutual agreement between both parties, a binding contract governs their transactions. This must include the buyer’s details, information of the seller, purchase order number, details on goods ordered, and terms of payment, price, and information on payment specifications and delivery method.

Service fulfillment

After the approval of the purchase order, it is the seller’s responsibility to supply the items stated in the purchase order. The seller can also generate an invoice that indicates the total cost of the items in the purchase order. This invoice summarizes the number of goods supplied and the cost owed to the seller.

After the approval for the purchase of the gift bags, you are to receive an invoice stating the cost of the items and a fulfilled order. Per the terms of payment, the seller might expect payment within a period (for instance 30 days) after issuing the invoice.

The recipient, the company’s warehouse manager, procurement officer, or administrative staff, receives the goods or services when they arrive.

3-way matching

This is the job of the procurement team. It compares the invoice from the seller with the purchase order and goods received notes to detect errors or fraudulent activities and eliminate fraudulent attempts. The buyer’s procurement team has to record an accurate match of the receipt of the goods note, supplier’s invoice, and purchase orders (PO). These three must tally to maintain clear records and for ease of audit.

Purchase order closure

The finance team receives the approved invoice and pays if the 3-way matching proves no discrepancies in the order trail. This leads to the closure of the purchase order placement.

Examine the invoice

A thorough examination of the invoice from the seller helps to forestall errors and mix-ups in the delivery of goods or quantity of items needed

Approve invoice and pay the vendor

After vetting the invoice, the financial team and procurement officers are to approve the invoice and begin the payment process

Documentation

The seller’s invoice, goods received note (GRN), and purchase order are important documents that the buyer must file and record as part of their documents for audit.