What is meant by Purchase Order?
A purchase order is a type of document given by a buyer to a seller which indicates the quantities, types and prices of the products. The purchase order is created for a legally binding contract which cannot be changed without the permission of two parties. Purchase order is also known as purchase requisition. Sometimes the customer can order quantities of the product from the seller over a period of time by creating standing or open purchasing orders. Usually open purchase orders are used for services which occur for a period of time.
The different types of purchase order are given below. They are purchase order number, data, name and address of both the customer and the seller, cost of the items and the total amount. For both customer and seller purchase order is the most important reference. Purchase order streamlines the purchasing process to a standard level so that it is an economical choice for the business. Purchase order is used to communicate clearly for both customers and the suppliers. Electronic purchase orders are also available and they are used to buy goods online for services.
There are several advantages for using purchase orders and they are given as it accurately prepares the purchase, sales and transaction reports of the company, it efficiently manages the suppliers, purchase order database records and customers, it organizes and streamlines the purchasing process of the business organizations, it provide facilities to generate purchase orders having cash, cheques, credit cards, debit and various options are also available. Purchase order provides people the simplest and the easiest way to manage company purchase order details. To manage business order details you dont need to use blank purchase order form, blank invoice form and blank purchase order template.
One can also send purchase orders by e-mail to the sellers to ensure the correct delivery items. It can save your time and it is generated automatically when your quantity falls below the specified minimum level. Purchase order receipts correct your data entry errors and it also saves time. It increases your invoice accuracy by posting accounts when purchase orders are received.