What is on a purchase order? The fields that matter

A purchase order is a buyer's written offer to buy goods or services on stated terms. Once the supplier accepts it, it is the contract for that sale. Every later step leans on it: the warehouse picks against it, the delivery note quotes it, and the buyer's accounts team will not pay an invoice that does not match it.

No two companies lay one out the same way, but almost every purchase order carries the same few groups of information.

The header

The header identifies the order.

• Order number. The buyer's reference. It is the single most important field, because the buyer will expect it on the delivery note and the invoice. Many accounts teams return invoices without a valid PO number unpaid.
• Order date. When the order was raised. It matters for price validity and for matching later.
• Revision. Some systems issue amended orders with the same number and a revision or change number. Treat a revised order as replacing the old one, not adding to it.
• Quote reference. If the order accepts a quote you sent, it should say which. That is how you know the prices on the order should be the ones you offered.
• Currency. Often only shown as a symbol on the amounts.
• Requested delivery date. For the whole order, or per line.

The parties

The buyer is the organisation placing the order. Its name usually sits in the letterhead, often with a VAT number and company number. A person named beside "Buyer" or "Ordered by" is the contact, not the customer.

The supplier (or vendor) is you. The order may include your account number in the buyer's system, which you will need to quote back on the invoice.

The addresses

There are usually two that matter, and mixing them up is a common and expensive mistake.

• Delivery address ("Ship to", "Deliver to"). Where the goods go. Often a warehouse, a site or a specific goods-in door, sometimes with delivery hours.
• Invoice address ("Bill to", "Invoice to"). Where the invoice goes. Increasingly this is an email address for an accounts payable mailbox rather than a postal address.

When an order says "deliver to the address above", the delivery address is the buyer's own.

The lines

Each line is one item:

• a part number, either the buyer's own code, yours, or both;
• a description;
• a quantity and a unit of measure: each, box, pair, case, metre;
• a unit price, sometimes with a discount;
• a line amount;
• sometimes a tax rate and a delivery date for that line only.

Units cause more trouble than they should. "Box of 200" priced per box is very different from 200 screws priced each.

The totals

Subtotal, any discount, carriage, tax and the total. These are the figures the buyer expects to see on your invoice. They are also the easiest way to catch a mistake: if the lines do not add up to the subtotal, either the order is wrong or it was read wrongly.

Terms and instructions

Payment terms ("30 days end of month", "Net 45"), shipping method, Incoterms for international orders, and free-text instructions such as delivery windows or "quote our PO number on all invoices". These are easy to skip and often the reason an invoice is rejected.

Why the fields matter more than the layout

From the supplier's side, the job is to get these fields out of the document and into your own system without changing any of them. The layout around them changes with every customer; the fields do not. That is the idea behind VioPO: whatever the document looks like, the output has the same fields, in the same format, with checks that the figures add up.