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Purchase order template

Ensure every order you place goes smoothly with this free template designed to formally order goods from suppliers.
Launch Template
Illustration of two purchase orders being compared

How to use the purchase order template

Fill in the details

Add your business name, supplier details, PO number, date, and the products or services you’re ordering with pricing and terms.

Send it off to your supplier

Email or share the completed purchase order with your supplier to confirm your order and set expectations.

Keep a copy for your records

Hold onto a digital or printed copy so you can track the order, match it to invoices, and keep your books clean going forward.

Let your suppliers know precisely what you need

The power of purchase orders

Using purchase orders helps you stay organized and reduces the risk of miscommunication with your suppliers. They create a paper trail that clearly shows what was agreed upon so there are no surprises down the road. They also make life easier when it’s time to match invoices, track spending, or prepare financial reports.

Why POs Are Important
Illustration of file labeled 'purchase orders' with arrows spanning out in all directions

So you sent a purchase order. Now what?

Once your purchase order is sent, the ball is in the supplier’s court. They’ll review and confirm the order, sometimes with an acknowledgment or contract. After that, they’ll deliver the goods or services and share an invoice. At that point, you can cross-check the invoice against your purchase order to make sure everything lines up before issuing payment.

How To Avoid Common Mistakes
Illustration of a box/delivery with a purchase order overlaid with a checkmark

The complete guide to purchase orders

A purchase order (or PO for short) is a formal document that a buyer sends to a seller to confirm they want to buy goods or services. It includes details like what’s being ordered, in what quantity, and at what price. Think of it as the official agreement before money changes hands. This can also be beneficial for the buyer, since they can get the ball rolling on their order without parting with the money to purchase it just yet. Purchase orders bring clarity and structure to transactions — serving as a written agreement that both parties can refer back to.

Purchase orders can help you keep track of what you ordered, when you ordered it, and from whom. They can help you avoid miscommunication with suppliers, give you documentation for every order, and make it easier to track budgets and spending. Plus, when it’s time to match up invoices, deliveries, and payments, having a PO makes reconciliation smooth and error-free.

A purchase order is sent before any goods or services are delivered—it's a buyer's request to purchase. An invoice is sent after delivery—it's the supplier’s request for payment. The PO confirms what the buyer is committing to, while the invoice reflects what was actually delivered and how much is owed. Both are important, and together they help close the loop on a transaction.

Yes, even if you’re a newer small business, purchase orders demonstrate that you’re serious and help to build trust with suppliers as you grow.

A purchase order includes your business name and contact info, the supplier’s details, a unique PO number, the date, the items or services being purchased, quantities, agreed prices, total cost, expected delivery date, shipping address, and payment terms. The more specific you are, the fewer issues you’ll run into later. Use our handy purchase order template to ensure you cover all your bases each time.

Yes, once a supplier accepts a purchase order, it can serve as a legally binding agreement. It documents each party’s agreement to specific terms, which can be crucial if any disputes arise later about what was agreed upon.

Once sent, the supplier will review your purchase order, and send confirmation. After that, they fulfill the order, delivering the goods or completing the service. They’ll typically follow up with an invoice that should match the details in your PO. You then verify everything lines up before issuing payment.

Some of the most common PO mistakes include leaving out important details, like payment terms, using inconsistent PO numbers (which can make tracking a mess), or not confirming delivery timelines with the supplier. Another misstep is forgetting to save and organize your purchase orders — if you can’t find the document later, it defeats the purpose.

Once you receive a purchase order, the next step is to make sure everything looks correct — quantities, prices, delivery dates, and terms. If anything needs adjusting, reach out to the buyer before proceeding. If all looks good, you can confirm the purchase order and get started on fulfilling it. After delivering the goods or services, send an invoice that matches the PO details, which helps the buyer process your payment quickly and without delays.

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Disclaimers and footnotes

    Mercury is a fintech company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column N.A., and Evolve Bank & Trust, Members FDIC. Deposit insurance covers the failure of an insured bank.