Procurement Terms



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Purchase Order (PO)

A purchase order (PO) is a commercial document issued by a buyer to a supplier, indicating the details of goods or services to be purchased. It is a formal offer to buy goods or services from a supplier and creates a legally binding contract between the buyer and the supplier once it is accepted.

A PO typically includes information such as the type and quantity of goods or services purchased, the agreed price, delivery dates, shipping and billing addresses, payment terms, and other relevant terms and conditions. It serves as a record of the agreement between the buyer and the supplier and helps to ensure that both parties understand their obligations.

The purchase order is often generated by the buyer's procurement department, based on a purchase requisition submitted by an internal department or employee. The purchase order is then sent to the supplier, who can use it as authorization to fulfill the order and ship the goods or provide the services. It is becoming more common for eProcurement systems automatically generate POs.

eProcurement Procurement Process Supplier Management
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