Nafeesa – The Writer's Blog

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Purchase Orders: How to prepare effectively?

Purchase orders are legal and commercial documents that are issued by a buyer to a seller. Purchase orders are issued for provisions of goods or services. These are very helpful for small businesses in order to track orders and receive payments for work done and follow a standard format for record keeping. One can easily understand its format by visiting Purchase Order Template. Purchase orders are integral part of business world. You may think why a purchase order is needed? To get answer of this question, keep reading!

Major three reasons can be considered to use purchase orders. These are very helpful:

  • Managing purchase of goods and services when price is primary consideration
  • To create an encumbrance in general ledger of accounts assisting your control your budget
  • To get everyone involved in purchase cycle that can be easily track order by referring to the same number

A purchase order records complete record of product type, quantity and agreed prices for products or services that seller is bound to provide to the buyer. It is a legally bounding document representing purchaser’s intent to purchase specific quantities of product at specified prices. If you are going to write a purchase order for your firm, you should aware of its essential contents that must be there at your company’s purchase order as these are fundamental contents of this document. Purchase order usually comprises of:

  • PO Number
  • Date of Shipping
  • Billing Address
  • Shipping Address
  • Requested Terms
  • Product’s list along with quantities and prices

Three main types of purchase orders are there. A little bit discussion about these types is going to be explained in remaining section of this post.

  • Electronic purchase orders are there that most companies are using now-a-days. These orders are prepared following specific standards.
  • Second type of purchase order is single-use purchase order. Such documents are usually used by retail stores. Basic purpose of this type of document is to keep track of a single order from a vendor until all items have been received from that order.
  • Third type of purchase order is blanket purchase orders. These documents are used in organizations to keep track of money that was spent for particular department or some specific project. It is also used to limit spending within a specific timeframe.

Hopefully, through above provided material you will be able to understand much more about purchase orders. It is hopped that you will be now able to prepare a professional document for your business use by your own.


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This entry was posted on august 18, 2012 by in Sales Management and tagged , , , , , .


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