Purchase order (PO)
A purchase order is the written order a business sends a supplier, listing the items, quantities and agreed prices.
A purchase order, or PO, is the document you send a supplier to place an order. It lists what you want, how much of it, at what price and when it should arrive. In many Pakistani businesses this happens over a phone call or a WhatsApp voice note, which is exactly why disputes start later.
Example
| Item | Quantity | Rate | Amount |
|---|---|---|---|
| Cement bags | 100 | Rs 1,350 | Rs 135,000 |
| Floor tiles (boxes) | 20 | Rs 2,400 | Rs 48,000 |
| Total | Rs 183,000 |
A hardware store in Gujranwala sends this PO to its supplier. When the delivery comes with cement billed at Rs 1,400 a bag, the owner shows the agreed rate of Rs 1,350 on the PO. On 100 bags, that saves Rs 5,000.
What a PO should include
- Supplier name and date
- Each item with quantity and agreed rate
- Delivery date and place, such as the shop or a particular godown
- Payment terms, for example 30 days credit
Why it matters
A PO puts the agreement on record before goods move. It is the reference for checking the delivery with a goods received note and for checking the supplier's bill before paying.
How software handles it
Trading software keeps purchases and supplier ledgers together. Taajir has purchase orders, then purchase invoices that update stock and the supplier ledger. ArfaPOS has purchase orders and supplier ledgers for restaurants on its Growth and Business plans. Our guide to the purchase order process shows a full workflow.
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