{"id":51193,"date":"2026-11-04T08:36:01","date_gmt":"2026-11-04T08:36:01","guid":{"rendered":"https:\/\/www.you.co\/biz\/?p=51193"},"modified":"2026-11-04T08:39:28","modified_gmt":"2026-11-04T08:39:28","slug":"purchase-order","status":"publish","type":"post","link":"https:\/\/www.you.co\/biz\/blog\/purchase-order\/","title":{"rendered":"What Is a PO? Purchase Order Meaning & Template [2026]"},"content":{"rendered":"\n

A purchase order is a buyer’s written order to a supplier, and once the supplier accepts it, both sides are usually bound by its terms<\/strong><\/h2>\n\n\n\n
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PO<\/strong> stands for purchase order<\/strong>, a document a buyer sends a supplier to order goods or services. It lists the items, the quantities, the agreed prices, the delivery date and the payment terms, and it carries a unique PO number.<\/p>\n\n\n\n

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A PO comes before the invoice. The buyer issues it, the supplier accepts it, the goods arrive, and only then does the supplier send an invoice that quotes the PO number. That order of documents lets a finance team check each invoice against what was actually ordered and received.<\/p>\n\n\n\n

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IRAS, Singapore’s tax authority, doesn’t name purchase orders in its list of records a GST-registered business must keep. A PO is therefore a business control rather than a tax form. Most businesses still use one, because it controls who can commit company money and gives finance something to match every supplier invoice against.<\/p>\n\n\n\n

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The job differs depending on which side you’re on. As the buyer, you raise the PO and later match it to the invoice. As the supplier, you check the PO against your quote, confirm it and quote its number on your delivery note and invoice.<\/p>\n\n\n\n

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Quick Answers: PO Meaning, PO vs Invoice, What to Include, Legal Status and Record Keeping<\/strong><\/h2>\n\n\n\n
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Question<\/strong><\/th>Short Answer<\/strong><\/th><\/tr><\/thead>
What does PO stand for?<\/strong><\/td>PO stands for purchase order. In other settings it can also mean post office, as in a PO Box, or pre-order.<\/td><\/tr>
What is a purchase order?<\/strong><\/td>A document a buyer sends a supplier to order goods or services, listing the items, quantities, prices, delivery date and payment terms.<\/td><\/tr>
What is the difference between a PO and an invoice?<\/strong><\/td>A PO is the buyer’s order, issued before delivery. An invoice is the supplier’s request for payment, issued after delivery.<\/td><\/tr>
What is the difference between a PO and a purchase requisition?<\/strong><\/td>A purchase requisition is an internal request to buy something. The PO is the order sent to the supplier once that request is approved.<\/td><\/tr>
What goes on a PO?<\/strong><\/td>A PO number, the date, buyer and supplier details, item descriptions, quantities, unit prices, GST treatment, delivery date and address, and payment terms.<\/td><\/tr>
Is a PO legally binding?<\/strong><\/td>A PO is the buyer’s offer. The agreement usually forms when the supplier accepts it, so agree the terms before you send it.<\/td><\/tr>
Does a PO show GST?<\/strong><\/td>It can show whether prices include 9% GST, but it isn’t a tax invoice. The supplier’s tax invoice carries the GST details IRAS requires.<\/td><\/tr>
How long do I keep POs?<\/strong><\/td>IRAS requires GST-registered businesses to keep records for at least 5 years. Keep each PO with the invoice it supports.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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A PO raised after delivery can’t do its main job, which is to give you something to check the invoice against.<\/p>\n\n\n\n

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Table of Contents<\/strong><\/h2>\n\n\n\n
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    \n
  1. What Is a Purchase Order (PO)?<\/strong><\/a><\/li>\n\n\n\n
  2. What Is the Difference Between a PO and an Invoice?<\/strong><\/a><\/li>\n\n\n\n
  3. What Goes on a Purchase Order?<\/strong><\/a><\/li>\n\n\n\n
  4. How to Create a Purchase Order<\/strong><\/a><\/li>\n\n\n\n
  5. What Happens After You Send a Purchase Order?<\/strong><\/a><\/li>\n\n\n\n
  6. Is a Purchase Order Legally Binding?<\/strong><\/a><\/li>\n\n\n\n
  7. Why Use a Purchase Order?<\/strong><\/a><\/li>\n\n\n\n
  8. Types of Purchase Orders<\/strong><\/a><\/li>\n\n\n\n
  9. Purchase Order System or Spreadsheet?<\/strong><\/a><\/li>\n\n\n\n
  10. How to Pay a Supplier Against a Purchase Order<\/strong><\/a><\/li>\n\n\n\n
  11. FAQs<\/strong><\/a><\/li>\n<\/ol>\n\n\n\n
    <\/div>\n\n\n\n

    What Is a Purchase Order (PO)?<\/strong><\/h2>\n\n\n\n
    <\/div>\n\n\n\n

    A purchase order is a document a buyer sends a supplier to order goods or services at agreed prices.<\/p>\n\n\n\n

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    Who issues it:<\/strong> The buyer. Any business that orders from a supplier on credit can issue one, from a design studio ordering printed brochures to a retailer restocking shelves.<\/p>\n\n\n\n

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    Who receives it:<\/strong> The supplier, who checks that it can provide the items at the stated price and delivery date, then confirms.<\/p>\n\n\n\n

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    When it’s sent:<\/strong> Before delivery, once the price and terms are agreed. A PO sent after the goods arrive can’t act as an approval, because the spend has already happened.<\/p>\n\n\n\n

    <\/div>\n\n\n\n

    What both sides do with the PO number:<\/strong> Both sides quote the PO number on the delivery note and the invoice, so every document in the deal can be matched back to the original order.<\/p>\n\n\n\n

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    What Else Does PO Stand For?<\/strong><\/h3>\n\n\n\n
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    In a business setting, PO stands for purchase order. Outside of business, PO can also mean post office, as in a PO Box, or pre-order in online selling across Southeast Asia. This guide uses PO only for the buyer’s order to a supplier.<\/p>\n\n\n\n

    <\/div>\n\n\n\n

    What Is the Difference Between a PO and an Invoice?<\/strong><\/h2>\n\n\n\n
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    A PO is the buyer’s order, issued before delivery, while an invoice is the supplier’s request for payment, issued after delivery.<\/p>\n\n\n\n

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    The two documents sit at opposite ends of the buying process. The table shows where each one fits among the other documents you’ll see.<\/p>\n\n\n\n

    <\/div>\n\n\n\n
    Document<\/strong><\/th>Issued by<\/strong><\/th>When it’s issued<\/strong><\/th>What it does<\/strong><\/th><\/tr><\/thead>
    Purchase requisition<\/strong><\/td>A department or employee<\/td>Before the PO<\/td>Asks internally for approval to buy something<\/td><\/tr>
    Quote<\/strong><\/td>Supplier<\/td>Before the order<\/td>States the price the supplier will charge<\/td><\/tr>
    Purchase order<\/strong><\/td>Buyer<\/td>After the quote is accepted, before delivery<\/td>Orders specific items at the agreed price<\/td><\/tr>
    Order confirmation<\/strong><\/td>Supplier<\/td>After receiving the PO<\/td>Confirms the supplier accepts the order and its details<\/td><\/tr>
    Goods receipt note<\/strong><\/td>Buyer’s receiving team<\/td>When the goods arrive<\/td>Records what was actually received<\/td><\/tr>
    Invoice<\/strong><\/td>Supplier<\/td>After delivery<\/td>Requests payment of the amount owed<\/td><\/tr>
    Receipt<\/strong><\/td>Supplier<\/td>After payment<\/td>Confirms the payment was received<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    <\/div>\n\n\n\n

    Quote the PO number on the invoice:<\/strong> The supplier should quote your PO number on the invoice, which lets your finance team find the matching order in seconds. IRAS doesn’t list a PO number among the details a tax invoice must show, according to its invoicing guidance<\/a>, so quoting it is something you agree with the supplier. Our guide to invoices<\/a> covers what a Singapore GST tax invoice must carry.<\/p>\n\n\n\n

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    PO vs order form:<\/strong> An order form is typically the supplier’s own template that a customer fills in. A PO is written by the buyer.<\/p>\n\n\n\n

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    Which Comes First, PO or PR?<\/strong><\/h3>\n\n\n\n
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    The purchase requisition (PR) comes first, and the purchase order follows once the requisition is approved.<\/p>\n\n\n\n

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    A PR is internal. An employee or department asks for something, and a manager approves the spend. The PO is external, because it goes to the supplier.<\/p>\n\n\n\n

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    In a larger business:<\/strong> The PR is a form in a procurement system, approved by the budget holder before the purchasing team raises the PO.<\/p>\n\n\n\n

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    In a small business:<\/strong> The PR can be a message to the owner asking “can we order 20 chairs?”, and the PO is issued after the reply. Save the message, because it records who approved the spend.<\/p>\n\n\n\n

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    Why keep them separate:<\/strong> Someone other than the requester approves the spend before the company commits to a supplier, so nobody approves their own purchase.<\/p>\n\n\n\n

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    What Goes on a Purchase Order?<\/strong><\/h2>\n\n\n\n
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    A purchase order should show a unique PO number, both parties’ details, itemised goods or services with prices, the delivery details and the payment terms.<\/p>\n\n\n\n

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    IRAS doesn’t prescribe a PO format, so each business sets its own. The table lists the fields POs commonly carry.<\/p>\n\n\n\n

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    Field<\/strong><\/th>What to put<\/strong><\/th>Why it matters<\/strong><\/th><\/tr><\/thead>
    PO number<\/strong><\/td>A unique, sequential reference such as PO-0107<\/td>The supplier quotes it on the delivery note and invoice<\/td><\/tr>
    Issue date<\/strong><\/td>The date you send the PO<\/td>Starts the clock on delivery and payment terms<\/td><\/tr>
    Buyer details<\/strong><\/td>Company name, address, UEN (Unique Entity Number) and a contact person<\/td>Tells the supplier who is ordering and where to send the invoice<\/td><\/tr>
    Supplier details<\/strong><\/td>Company name, address and a contact person<\/td>Confirms who the order is for<\/td><\/tr>
    Quote reference<\/strong><\/td>The supplier’s quote number and date<\/td>Links the PO to the price already agreed<\/td><\/tr>
    Item descriptions<\/strong><\/td>Product or service name, SKU or model code, size, colour or specification<\/td>Specific descriptions prevent wrong deliveries<\/td><\/tr>
    Quantity and unit price<\/strong><\/td>One line per item<\/td>Lets finance check the invoice line by line<\/td><\/tr>
    GST treatment<\/strong><\/td>Whether prices exclude or include 9% GST, and the GST amount<\/td>Keeps the budget accurate before the invoice arrives<\/td><\/tr>
    Currency<\/strong><\/td>SGD, or the foreign currency if you’re ordering from overseas<\/td>Avoids disagreement over what the total means<\/td><\/tr>
    Delivery date and address<\/strong><\/td>The date you need the goods and where they should go<\/td>Gives you a date to hold the supplier to<\/td><\/tr>
    Delivery terms<\/strong><\/td>Who arranges and pays for shipping, insurance and import duties<\/td>Matters most on cross-border orders<\/td><\/tr>
    Payment terms<\/strong><\/td>For example, net 30, or a deposit and balance<\/td>Sets when payment falls due<\/td><\/tr>
    Approver<\/strong><\/td>Name or title of the person who approved the PO, and the date<\/td>Shows who committed the money<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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    Showing GST on a PO:<\/strong> A PO isn’t a tax invoice, so IRAS’s tax invoice rules apply to the supplier’s invoice and not to the PO. Showing GST on the PO is for your own budgeting. If you aren’t registered yet, our GST registration guide<\/a> explains when registration becomes compulsory.<\/p>\n\n\n\n

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    Purchase Order Template and Sample<\/strong><\/h3>\n\n\n\n
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    Sample Studio Pte Ltd, a fictional design studio, is ordering brochures and banners from Bright Print Pte Ltd, a fictional printer.<\/p>\n\n\n\n

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    PURCHASE ORDER<\/strong><\/strong><\/th><\/th><\/tr><\/thead>
    Buyer<\/strong><\/td>Sample Studio Pte Ltd, 123 Main Street, Singapore (UEN 200000000A)<\/td><\/tr>
    Supplier<\/strong><\/td>Bright Print Pte Ltd, 88 Sample Road, Singapore<\/td><\/tr>
    PO number<\/strong><\/td>PO-0107<\/td><\/tr>
    PO date<\/strong><\/td>3 November 2026<\/td><\/tr>
    Quote reference<\/strong><\/td>Quote Q-2291, dated 29 October 2026<\/td><\/tr>
    Brochures, 500 copies at S$2.40<\/strong><\/td>S$1,200.00<\/td><\/tr>
    Roll-up banners, 4 units at S$150.00<\/strong><\/td>S$600.00<\/td><\/tr>
    Total before GST<\/strong><\/td>S$1,800.00<\/td><\/tr>
    GST at 9%<\/strong><\/td>S$162.00<\/td><\/tr>
    Total including GST<\/strong><\/td>S$1,962.00<\/td><\/tr>
    Delivery<\/strong><\/td>By 17 November 2026 to 123 Main Street, Singapore<\/td><\/tr>
    Payment terms<\/strong><\/td>Net 30 from the invoice date<\/td><\/tr>
    Approved by<\/strong><\/td>Operations Manager, 3 November 2026<\/td><\/tr>
    Instruction<\/strong><\/td>Quote PO-0107 on the delivery note and the invoice<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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    What Do FOB, Net 30 and DDP Mean on a PO?<\/strong><\/h3>\n\n\n\n
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    Net 30 means payment is due within 30 days, usually counted from the invoice date. FOB means free on board, and DDP means delivered duty paid.<\/p>\n\n\n\n

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    SKU:<\/strong> A stock-keeping unit, the code a business uses for one specific product. Including it prevents the supplier from shipping a similar item in the wrong size or colour.<\/p>\n\n\n\n

    <\/div>\n\n\n\n

    Net 30:<\/strong> Full payment is due within 30 days, usually counted from the invoice date, so check the start date in the agreed terms. Net 14 and net 60 work the same way with a shorter or longer window.<\/p>\n\n\n\n

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    Incoterms:<\/strong> The standard trade terms published by the International Chamber of Commerce<\/a>. They’re mostly used on goods shipped across borders, and they set out the tasks, costs and risks of getting goods from seller to buyer, including who pays for transport and who carries the risk at each stage.<\/p>\n\n\n\n

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    FOB (free on board):<\/strong> The seller’s job ends once the goods are loaded onto the ship the buyer names at the named port. From that point the buyer carries the cost and the risk. FOB is meant for sea and inland waterway shipments only, and for loose cargo rather than containers.<\/p>\n\n\n\n

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    DDP (delivered duty paid):<\/strong> The seller gets the goods to the named place and handles import clearance, including the duties and taxes.<\/p>\n\n\n\n

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    How to Create a Purchase Order<\/strong><\/h2>\n\n\n\n
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    To create a purchase order, get the purchase approved, confirm the supplier’s price, fill in the fields above, number the PO, send it and file a copy.<\/p>\n\n\n\n

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    <\/p>

    1. Get the purchase approved<\/strong>

      Check the budget and get sign-off from whoever holds it before you commit to a supplier. In a larger business this approval is the purchase requisition. In a small one, a saved message from the owner is enough.<\/p> <\/li>

    2. Confirm the supplier’s price in writing<\/strong>

      Ask for a quote with item descriptions, unit prices, the delivery date and the payment terms, so the PO repeats what the supplier has already offered.<\/p> <\/li>

    3. Fill in the PO fields<\/strong>

      Use the table above, including the GST treatment, the currency and the delivery address.<\/p> <\/li>

    4. Give the PO a unique number and date<\/strong>

      Number POs in sequence, such as PO-0107 followed by PO-0108, so a missing or duplicated number stands out when someone reviews the records.<\/p> <\/li>

    5. Get the PO approved by the right person<\/strong>

      Set approval thresholds, for example, the director signs anything above S$5,000. Write them into a short purchase order policy so staff know who approves what.<\/p> <\/li>

    6. Send the PO and ask for confirmation<\/strong>

      Email it as a PDF and ask the supplier to reply confirming the price, the quantities and the delivery date.<\/p> <\/li>

    7. File your copy<\/strong>

      Keep the PO in one folder with the quote, the supplier’s confirmation and, later, the delivery note and invoice.<\/p> <\/li><\/ol><\/div>\n\n\n\n

      <\/div>\n\n\n\n

      Tools for making a PO:<\/strong> A Word, Excel or Google Sheets template works for your first few. Some accounting software can also generate POs, so check what yours offers. Our accounting software guide<\/a> compares the options for Singapore businesses.<\/p>\n\n\n\n

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      Small purchases:<\/strong> Many organisations encourage staff to use a purchasing card for low-value purchases instead of issuing a PO, according to Wikipedia’s purchase order entry. Set a cut-off in your PO policy, such as S$200, and let card limits cover everything below it. A petty cash process<\/a> covers small cash purchases.<\/p>\n\n\n\n

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      Common Purchase Order Mistakes<\/strong><\/h3>\n\n\n\n
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      Six mistakes make a purchase order less useful as a record or as something to match an invoice against.<\/p>\n\n\n\n

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      1. Raising the PO after delivery.<\/strong> The invoice then has nothing to be checked against, and the spend was never approved in advance.
        <\/li>\n\n\n\n
      2. Writing vague item descriptions.<\/strong> A line such as “stationery” lets the supplier decide what to send. Name the item, the quantity and the SKU or model.
        <\/li>\n\n\n\n
      3. Leaving out the quote reference and terms.<\/strong> Without them, a dispute over price or conditions turns into an argument about whose paperwork applies.
        <\/li>\n\n\n\n
      4. Reusing or skipping PO numbers.<\/strong> A duplicated or missing number makes it harder for anyone reviewing the records to trace an order.
        <\/li>\n\n\n\n
      5. Changing the order by phone.<\/strong> A new quantity or date agreed verbally leaves the PO and the invoice disagreeing. Send an amended PO and get written confirmation.
        <\/li>\n\n\n\n
      6. Leaving the PO open after the order is complete.<\/strong> An open PO can be matched to a second invoice for the same order, so close it once the order is delivered and the final invoice is in.<\/li>\n<\/ol>\n\n\n\n
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        What Happens After You Send a Purchase Order?<\/strong><\/h2>\n\n\n\n
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        After you send a PO, the supplier confirms it, supplies the goods and invoices you, and you pay once the PO, the delivery record and the invoice agree.<\/p>\n\n\n\n

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        The purchase-to-pay process runs in seven steps from the first request to the closed order.<\/p>\n\n\n\n

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          \n
        1. Requisition:<\/strong> An employee or department asks to buy something.<\/li>\n\n\n\n
        2. Approval and PO:<\/strong> The budget holder approves, and the buyer raises and sends the PO.<\/li>\n\n\n\n
        3. Supplier confirmation:<\/strong> The supplier accepts the PO or queries a term.<\/li>\n\n\n\n
        4. Delivery and receiving:<\/strong> The goods arrive, and the receiving team checks them against the PO.<\/li>\n\n\n\n
        5. Invoice:<\/strong> The supplier invoices for what was delivered, quoting the PO number.<\/li>\n\n\n\n
        6. Three-way match:<\/strong> Finance checks that the PO, the delivery record and the invoice agree.<\/li>\n\n\n\n
        7. Payment and close:<\/strong> The buyer pays the invoice and closes the PO.<\/li>\n<\/ol>\n\n\n\n
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          Goods receipt:<\/strong> When the goods arrive, the receiving team counts them against the PO and records what came in on a goods receipt note. The note is the buyer’s own record of what was actually delivered.<\/p>\n\n\n\n

          <\/div>\n\n\n\n

          Three-way match:<\/strong> Finance compares the PO, the goods receipt note and the supplier invoice, checking the items, the quantities and the prices on each. If all three agree, the invoice is safe to pay.<\/p>\n\n\n\n

          <\/div>\n\n\n\n

          Closing the PO:<\/strong> Mark the PO closed once the order is fully delivered and the final invoice has arrived, and not before. A duplicate invoice for the same order then has no open PO to match against, so it gets stopped before payment.<\/p>\n\n\n\n

          <\/div>\n\n\n\n

          What If the Three-Way Match Fails?<\/strong><\/h3>\n\n\n\n
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          If the three documents don’t agree, hold the payment and query the difference with the supplier before paying.<\/p>\n\n\n\n

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          Take the sample PO-0107 from earlier. The PO orders 500 brochures. The goods receipt note records 480 arriving, and the supplier’s invoice charges for 500.<\/p>\n\n\n\n

          <\/div>\n\n\n\n

          If the quantity is short:<\/strong> Ask the supplier either to deliver the missing 20 or to issue a credit note for them. Our credit note guide<\/a> explains what a credit note must show.<\/p>\n\n\n\n

          <\/div>\n\n\n\n

          If the price is different:<\/strong> An invoice charging S$2.60 a brochure against S$2.40 on the PO needs a query. The PO and the supplier’s confirmation are your evidence of the agreed price.<\/p>\n\n\n\n

          <\/div>\n\n\n\n

          If there’s no PO at all:<\/strong> Find out who ordered the goods and whether the spend was approved before you pay.<\/p>\n\n\n\n

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          What to Do When You Receive a Purchase Order<\/strong><\/h3>\n\n\n\n
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          When you receive a PO as a supplier, check every line against your quote, confirm in writing, and start work or ship only after that.<\/p>\n\n\n\n

          <\/div>\n\n\n\n