A purchase order is an authorized commercial document issued by a buyer to a supplier that describes the goods or services, quantities, prices, delivery, accounting, terms, and other agreed conditions. Its legal and accounting effect depends on the governing agreement, jurisdiction, policy, and acceptance. In an integrated process, the ERP remains authoritative for the agreed order record.
In plain English
It is the organization’s authorized order to a supplier.
Illustrative example
At Northstar Industrial Systems, an approved equipment award becomes a purchase order with line items, delivery location, terms, and accounting data, then follows the agreed ERP handoff.
- Related terms
- Purchase requisition; PO acknowledgment; Goods receipt; Invoice matching
- Lifecycle stages
- Execute; Receive; Invoice
- Stakeholders
- Procurement; Finance; Supplier; Operations