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How to create a Purchase Order Template and its growing Importance


Have you ever played a jigsaw puzzle? Do you know that every piece in a puzzle is as important as the next one? The same goes for a business. Every piece is essential. When they all come together, you have a genuinely successful working business. Today we will discuss one such important part of this puzzle – Purchase Order. But, what fun is the puzzle without a hint? So, we will talk about the Purchase Order Template as well. To ease you with your burdened troubles, we will also show you a Purchase Order Template.

Now, why is it important? Maybe because you can track the progress of your purchases? Or perhaps because you can view the purchases made in the present as well the past. There are a lot of reasons behind the importance of a purchase order Template. And we will get there. But, first things first. Let us begin with the what’s and the why’s.

Introduction of PO

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What is a Purchase Order

A purchase order is an official piece of document that a buyer creates and issues to his seller or vendor or manufacturer. The Purchase Order covers a lot of important information such as tracking number, PO number, goods to be ordered, quantities, delivery address, company address, and (agreed) price. This way, both parties are aware of the information, and any sort of future conflicts does not arise. 

The Purchase Order specifically helps smoothen the process. In case the seller forgets to dispatch a particular item, you, as a buyer, can always point him to the issued Purchase Order. Also, if the seller refuses on the agreed price, once again, the Purchase Order comes in handy. Now, imagine with roles reversed, let us see how it helps the seller. Imagine that the buyer does not pay for the mentioned goods; the seller can refer to the PO that the buyer sent. In another scenario, if the buyer refuses to accept an item’s specific quantities, the seller can always show the buyer the issued Purchase Order. 

As you can see, a Purchase Order is clear communication between the buyer and the seller. It serves as a written document stating both parties adhere to the given information.

Things to cover in a Purchase Order Template

A Purchase Order is not just a piece of paper but a legal document stating the exchange of goods between two parties. So, it is hugely important, and it does need to cover a few crucial details. Let us see what all should be present in creating the perfect Purchase Order Template.

1. Name and Address of the Two Parties

No documents can begin or end without the company information. So, needless to say, it is crucial to mention the name, address, and contact information of the buyer and seller in the Purchase Order Template. This will help in better communication between the buyer and seller and ensure the order reaches the correct recipient.  Name and Address

2. Billing Address and Delivery Address

For many large organizations, the Head Office and the warehouse are at different locations. It is, therefore, vital to provide both the address and delivery information to avoid any confusion. If the addresses are the same, then also, it is wise to mention it separately under both the columns. Because, in case you expand in the future, you always have the option to change the address of delivery. Thus, always keep both the columns even if the addresses are the same.

3. Date and Purchase Order Number

Every order has a predefined delivery schedule; let us say – 15 days or 30 days, depending on the company to company. When a date is mentioned on the Purchase Order, the company is aware of the timeline and can work swiftly towards that direction. Also, a PO Number is important to keep track of the order. Let us assume that you sent 4 different Purchase Orders to the seller within a month. Now, you need to talk with the seller about one of the 4 Purchase Orders. How will you begin the conversation? Easy. This is where the PO number helps. You can begin with ‘Please refer to PO No. 123 as it needs some changes’. Purchase Order Number helps in tracking the order and managing transparency between the parties. Your Purchase Order Number should contain the month and year as well. For eg.: PO_42_0620. Now, here,

PO stands for Purchase Order

Number 42 stands for the number of orders placed. In this case, this is the 42nd order.

Number 0620 stands for Month and Year.Date and Purchase Order Number

So, whenever you refer to any past order, the sorting out of the PO becomes easier and much organized.

4. Product Information

After covering the above information, now you can work on your product details. Here, mention the product name, description, quantity, and price for every item. Also, in case of technical orders, mention the technical details as well for better clarification.

5. Terms and Conditions and Special Instructions


Terms and Conditions

To end the Purchase Order Template, always close it with terms and conditions. Here, you can mention the payment terms, as discussed. Also, you can specify the delivery details and timeline. In Special Instructions, you can suggest any additional instructions such as ‘Please send the catalog along with the order’ or anything else that you feel obliged to mention.

Why is a Purchase Order important for Business?

As we discussed in brief, a Purchase Order Template should cover all the necessary information to track, receive, and easily dictate the purchase. So, when we talk about the importance of Purchase Order Templates, we can surely name that to be the most important.!

Purchase Order important for Business

To name a few, let us begin with:

1. Simplify Purchase Process

The adoption of a Purchase Order Template within the organization ensures that a smooth and transparent process is followed in the company. This way, when a single purchase order turns to hundreds of thousands of purchase orders, the template can provide steadiness. So, instead of searching through previous orders or relying upon assumptions, a Purchase Order can easily track any information that you want to find and simplifies the process along the way.

2. Serves as a Legal Document

The Purchase Order once sent and acknowledged serves as a legal binding document. This way, both the seller and buyer are protected on the said offer. If any party tries to differ, the other can always present the acknowledged Purchase Order to clarify matters.

3. Physical Document is always better than Verbal Discussion

Many companies still work on verbal orders. They call the supplier and give the order and wait for the arrival. In the midst, if anything goes wrong – wrong quantity, faulty product, change in price, damaged goods, who will be held accountable? Without a physical document to show as proof, how can a buyer point out to the seller? A physical document proves as a better means of communication and serves as transparency.

4. Reviewing Past Purchases

The initial few years are crucial for any business. When you begin advancing your purchases, it is essential to understand your purchase trends over the past months. Thus, when you have purchase order receipts, you can check the previous orders easily and make better decisions. Now imagine, all your purchases are based on verbal communication. How would you review your past orders? If you had to make a purchase or view a trend, it would be challenging without having physical documents.

Why is Automation good for Purchase Order Template

Now, there certainly are many ways to create a perfect Purchase Order Template. But, why did I mention trust automation? Well, let us find out.

Templates can be created on Excel spreadsheets or Microsoft Word or you can even print Purchase Order Books. But none of these options are entirely good.! Why so?


Automation good for Purchase Order Template


Excel Spreadsheets need a lot of formulas. Every time you create a spreadsheet, you need to make sure your formulas are correct. If it gets messed up anywhere, well, you end up losing more than gaining. And let’s face it, not everyone is good at Excel formulas. Now, you may argue, I know someone great at this, I will hire them. Well, you surely can. But again, that includes additional expenses, and if ever they leave the organization, you are back to square one. 

Microsoft Word documents are again another way of creating purchase order templates. But, every time you will have to feed in information from scratch.! Do you know how time-consuming it is.!? Also, purchase orders are needed at least several times in a month, imagine typing and entering everything from the date till the prices and summing up the price.!. It is definitely time-consuming.! So, why choose this option.

Print-out Purchase Order Books are again another option. This again incurs additional expenses and huge piles of books.! Months and months of purchase order books stacked up in a pile of folders. Geez.! Moreover, if you ever have to refer to a back entry, well, which book will you remove out of the pile of stack.? So, well, I personally would never want to be in such a situation.!

Automation of PO

Talking about Automation. Once you make an entry, it saves the data. So, next time you are making an entry for the same vendor, all the necessary information is automatically fed in the sheet. Also, the orders are pre-fed in the sheet, so just type the initials, and you can select from the drop-in box. Whenever you have to check a back entry, all you need to do is type in the check the folder.! Also, no paper.! You are indirectly saving papers. Isn’t technology a good thing.!

The Perfect Purchase Order Template

As discussed earlier, a perfect Purchase Order Template needs to have all the necessary information. Also, thanks to automation, all you need to do is feed details, and rest is automatically entered in the sheet.

The Perfect Purchase Order Template

Now, let us see the complete version of this Purchase Order.

Purchase Order_Full

If you are confused about what to do, you need not worry. There are few template choices that you can select from the below options.

template choices

Or you can create a Custom Template by entering the below details.

Custom Template

Here you have various options, from choosing the organization name to the warehouse, or item names, and header or footer. There are many options that you can choose and create a perfect Purchase Order Template.


So, what do you think.!?

Why not invest in the future rather than opting for the other options. Yes, you can use excel sheets or word documents or books, but they definitely have more cons than pros. Also, the true quality of a businessman is to invest in a long-term goal. Look deep in the future. Automation or purchase order software is the future. Purchase Order Template is just one such function, but inventory software yields many more benefits.


Ankita Bora

Ankita Bora

I write to express and believe that words are powerful. Long drives and traveling are my weekend goals. I write poems when I am happy and enjoy a solo outing. My mind works best when I am by myself at a cafe with a tall glass of cold coffee and sandwiches. I dance in the rain and heat never bothers me. For me, winters are the worst! I laugh when I cry and bring a smile to everyone close to me. Content Writer at Orderhive, I present knowledge on technical aspects on weekdays and on weekends I write for myself.

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