What is purchase order sample ?
A purchase order, or PO, is a formal document that specifies products or services a business intends to purchase. It is a contract that states the terms and conditions of business between the two parties. The supplier agrees to sell the products or services and accepts payment as per the document, and the buyer agrees to buy the products at a fixed price and specified time. A purchase order can also be issued for future delivery and contain additional information about customs, shipping, taxes, and duties. Understanding what a purchase order is and how it works can help you manage your inventory, track expenses, and determine where your company stands financially. In this article, we will explore how a purchase order sample can ease the process.
Purchase Order Sample- Ways to Make Your Sales Process a Breeze
What is a purchase order sample?
A purchase order sample is a template that iterates the order or pattern buyers must use to write out the order for the goods or services they intend to purchase. The different sections on the sample include critical information such as the purchaser's name, product type, order number, delivery dates and location, payment terms, terms of sale, owner's signature, and receiving instructions. Simple samples can be created with tools such as Microsoft Excel or Google Sheets, though specialized purchasing software such as Zipinventory eases the order process with an in-built and customizable form template. Setting a structured PO sample is crucial to streamlining the purchasing process, steering clear of ambiguity, and maximizing efficiency.
Why do you need a purchase order sample?
Purchase order samples enable a seamless purchasing process as you don't have to go through the trouble of writing out a new form every time your business needs to purchase a good or service. Since the template already mentions the required fields, all you have to do is fill out the relevant information and proceed with requesting your order.
Digitally standardizing the purchasing process also reduces the chances of human error. Furthermore, manually processing purchase orders is both tedious and time-consuming, and most businesses suffer delays worth days, if not weeks, to make purchases. A software like Zipinventory allows both management and staff to agree on inventory by keeping channels of communication open and running smoothly. Purchase order samples also allow businesses to save their key vendors' details, so you don't have to repeatedly search or fill out the same information. They also allow orders to be sent instantly, thus saving you time.
It is only reasonable to set a standard purchasing process, which includes order templates, in motion to make the order process easier for everyone involved.
You don’t know what to expect from the purchase order process
Create a purchase order sample that outlines how the customer will work with your company with Zip Inventory
Online employee scheduling software that makes shift planning effortless.
Try it free for 14 days.
How to write a purchase order sample?
Once buyers decide to order a set of goods or services from a source, they draft a purchase order and send it to the seller. This is where a purchase order sample saves companies time and money, as it already consists of a set of details vital for the completion of an order, such as the names of the buyer and the seller, their addresses, product type and quantity, and delivery instructions. After the seller reviews the purchase order and agrees to fulfil the request, it is approved. The supplier will then raise an invoice that corroborates the price mentioned on the purchase order. Inventory software usually allows the customisation of purchase orders. The purchase order sample that you choose for your company must include fields for the aforementioned information for orders to be accepted by suppliers.
Types of purchase order sample
It can be slightly difficult to figure out what type of purchase order you need for maximum efficiency when you're new to purchasing. But crafting a purchasing order, and by extension, a form template is of utmost importance when ordering purchases for your company.
The various templates that buyers can create to ensure a seamless purchasing process are contingent upon the type of purchase order required to acquire the goods or services they wish to buy. To understand how one sample would vary from the other, let's go over the different types of purchase orders. You must pick the right kind of purchase order for your business needs to create the purchase order sample that would be most beneficial for you.
1. Standard purchase order
A standard purchase order comprises details of the purchase price, delivery dates, quantity but is typically raised for infrequent or one-off purchases. These orders are usually for a shorter period. They may arise from a past order, an ad, a special offer from the supplier, or the involved parties' negotiations regarding price and quantity.
It's difficult to get new customers to understand your company's process
Zip Inventory will help you create a purchase order sample that outlines what your customer is going to experience with your company
Online employee scheduling software that makes shift planning effortless.
Try it free for 14 days.
2. Blanket purchase order
A blanket purchase order is raised in the event of recurring purchases with multiple delivery dates over a longer period. When using this type of purchase order, the two parties are bound to a contract with a start and end date as well as a negotiated price. The parties can extend this predetermined duration, which is atypical of a standard purchase order.
3. Contract purchase order
Though similar to standard and blanket purchase orders, a contract purchase order omits the list of goods or services. It, however, states the terms and conditions based on which future purchase orders are created. As a result, they work as legally binding documents between buyers and sellers who wish to carry on their commercial association for a prolonged period.
4. Planned purchase order
Planned purchase orders are long-term agreements where buyers commit to procuring goods or services from a single supplier. Like a standard purchase order, these types of purchase order requires buyers to state delivery schedules and additional details of the items they wish to acquire. The order is then released depending upon the buyer's needs through the agreement period.
The format patterns to be included in a purchase order sample
Irrespective of the purchase orders your company needs, creating a sample is a critical step in ensuring the smooth functioning of the purchasing process. Though there is no strict format for creating a purchase order sample, it should typically include the following information.
1. Header of the purchase order
The header, placed at the top of the page, includes details such as the company's name, address, purchase order date, and order number.
2. Information about the supplier
This is where the buyer enters the name and address of the recipient of the purchase order.
3. To whom will it be shipped to
Mention the address to which the order should be sent in this section. The buyer can also indicate the shipping method, terms and delivery dates here.
4. Details of the order
In order to clearly communicate your needs to your supplier and improve Inventory Management for your company, provide a line item along with the product code or SKU number for each product that you have requested. This section of the purchase order sample can also include a description of the ordered items, quantity and price per unit and the delivery dates.
Conclude the purchase order form with the total amount payable to the supplier. The sum should consider any discounts you might be availing of, shipping costs and all applicable taxes.
The difference between purchase orders and invoices
Despite carrying similar information, purchase orders and invoices are intrinsically different documents. Buyers issue purchase orders, where they explicitly indicate the details of the goods or services they intend to purchase, delivery dates and the negotiated price. When the order is placed, this document is exchanged between the buyer and the seller.
An invoice, on the other hand, is an official document sent to the buyer by the vendor upon the fulfilment of an order. It includes the goods and services that have been delivered, the pre-negotiated financial terms, applicable discounts, and the payment options. In addition to the PO number, the document sent by the supplier will also mention an invoice number.
Though both purchase orders and invoices are legally binding documents, grasping the different purposes the two documents serve will allow both buyers and sellers to remain organised and in control of your company's finances. While purchase orders help companies maintain their cash flow, invoices enable sellers to monitor their revenue.
These two documents are also a good way to ascertain if the sale has been carried out satisfactorily. Ideally, the contents of a purchase order and an invoice should match completely. Identical purchase orders and invoices suggest that the seller has delivered exactly what the buyer had requested. Even in the case of a discrepancy between the documents, it becomes easy for buyers to figure out the errors that might have occurred in the purchase process. Suppliers, too, can refer to invoices to detect issues within their Supply Chain and understand how to change their current practices.
The benefits of creating order templates and invoices are many. Apart from helping companies maintain accurate and detailed records of sales and purchases, they also help make business finance fuss-free.