what do you mean by purchase order?

Question

bills

Answer 1

It is an "instrument" used within a business that authorizes the purchase of goods. This way an employee can't make ill considered purchas for his department, or divert goods for his own use. I.E. the boss has to sign off on it.

Answer 2

A Purchase Order (abbreviated PO) is a commercial document issued by a buyer to a seller, indicating the type, quantities and agreed prices for products or services that the seller will provide to the buyer. Sending a PO to a supplier constitutes a legal offer to buy products or services. Acceptance of a PO by a seller usually forms a once-off contract between the buyer and seller so no contract exists until the PO is accepted.[1] POs usually also specify additional conditions such as terms of payment, Incoterms for liability and freight responsibility, and required delivery date.


[edit] Structure

A purchase order usually contains: PO number, shipping date, billing address, shipping address, requested terms, and a list of products with quantities and prices.

[edit] Rationale

There are several reasons why companies use POs. They allow buyers to clearly communicate their intentions to sellers, and they protect sellers in the event that a buyer refuses to pay for something which was sent. For example, say that Alice works for Company A and orders some parts from Bob at Company B. There could be a problem if Alice didn’t actually have authority to authorize this order--maybe she thought she had her boss’s permission, but there was a miscommunication. So, the order gets returned and Company B loses money. Depending on the situation, Company B might only lose shipping and packing costs, but they might also lose significant manufacturing labor and materials costs and other expenses. They might lose the product entirely (e.g. if it is perishable).

In order to prevent such problems, sellers often request purchase orders from buyers. This document represents the buyer’s intent to purchase specific quantities of product at specified prices. In the event of non-payment, the seller can use the PO as a legal document in a court of law to demonstrate the buyer’s intent and to facilitate collection efforts. Companies usually request POs when doing business with other companies for orders of significant size, as the PO reduces the risks involved.

Answer 3

Use a purchase order to document what you're buying from a vendor. It will help you track expenses and plan for future payables.

Answer 4

In some companies, managers are allowed to sign a commitment to buy goods on behalf of the Company. They sign a purchase order: one copy goes to the supplier to send the goods to you; the other goes to Accounts Payable to authorize the check to pay when the bill arrives.

That way - the manager doesn't get a check book, but can get what they need to run the company.

Answer 5

purchase order (po) is confirmed buying

it has requirement of material ,quantity
date of supply and payment modules