Purchase order. Buyer-side.
Issue a priced PO to a vendor with ship-to, bill-to, line items, delivery date, and terms. Download a branded PDF. Browser-only; nothing is saved.
Parties, addresses, lines, terms.
Authorized spend.
POs are the paper trail of commitments.
A purchase order is a written authorization issued by the buyer, committing the business to receive and pay for specific goods or services at an agreed price on an agreed date. It is the legal-contract layer beneath any transaction that defers payment beyond the swipe of a card. The key inversion to remember: an invoice is issued by the seller to collect, a PO is issued by the buyer to authorize. Both exist because either side needs a paper trail when the other side disputes what was agreed.
Small businesses under-use POs because they feel bureaucratic. The reality: you do not need a PO for routine card purchases, but you do need one the first time a vendor commits scope beyond 30 days or priced work above your internal threshold. The threshold varies; $1,000 to $5,000 is a common starting point. Anything above the threshold routes through a PO. This is the same rule most enterprise AP systems enforce natively via platforms like SAP, Oracle, or NetSuite, and the reason those systems refuse to pay invoices that lack a matching PO.
The two fields most often skipped on self-built POs: separate ship-to and bill-to addresses, and a clear required-by date. Ship-to is where the delivery lands (for services: the account the work ships into, like admin@acme.com). Bill-to is where the invoice goes (almost always your AP contact). Making them distinct prevents the common failure mode of the vendor sending the invoice to the same person who authorized the PO, who then forwards it late, who then eats a late-payment fee. Required-by is the deadline; miss that date and the PO becomes grounds for enforcing the delivery expectation or cancelling without penalty.
Payment terms on the PO override the vendor's quote terms once accepted. If a vendor quoted NET-14 but your standard is NET-30, state NET-30 on the PO - the vendor who countersigns is agreeing to the PO terms, not the quote. The four common US B2B terms: NET-30 (the default), NET-60 (used by larger buyers), 2/10 NET-30 (2% discount if paid within 10 days - common in wholesale), and Due on receipt (for new vendor relationships). Include late-payment language only if you actually plan to enforce it; empty threats erode vendor relationships faster than the missed payment deadline they were meant to prevent.
Related tools: Invoice generator for the vendor side. Quote generator for the vendor-quote step that precedes the PO. Receipt generator for payment acknowledgment. SOW generator for complex engagements where the PO references a longer scope document.
Seven answers.
What is a purchase order and how does it differ from an invoice?
A purchase order (PO) is issued by the buyer to authorize a vendor to deliver goods or services at a stated price. An invoice is issued by the vendor after delivery to request payment. The flow is: buyer issues PO, vendor acknowledges and delivers, vendor issues invoice, buyer matches invoice against PO, buyer pays. The PO is the binding authorization; without one, many mid-market and enterprise AP systems will refuse to pay an incoming invoice at all.
When should a small business issue a purchase order?
Use a PO when the transaction involves: 1) a commitment to pay later (not a credit card swipe at the counter), 2) a vendor you want to hold accountable to a specific scope, price, or delivery date, or 3) any purchase over a threshold you set internally (commonly $1,000 to $5,000 for small businesses). POs are underused by small teams because they feel bureaucratic, but they pay off the first time a vendor over-delivers and tries to charge for it, or under-delivers and disputes the shortfall. The PO is your evidence of what was agreed to.
What is the standard PO numbering convention?
Use a consistent prefix plus date plus sequence: PO-2026-001 is common. Some businesses prefix by department (MKTG-PO-001). The goal is uniqueness across your business and parseability by year so your finance team can pull quarterly reports. Never reuse numbers. If a PO is cancelled, archive the number and move on; reusing a cancelled PO number creates reconciliation issues two years later when auditors cross-reference against invoices.
What payment terms should a PO specify?
The four common terms. NET-30 (payment due 30 days after invoice receipt) is the US B2B default. NET-60 is used by larger buyers negotiating cash flow. 2/10 NET-30 offers a 2 percent discount if paid in 10 days, otherwise full NET-30 - common in wholesale and manufacturing. Due on receipt is used for new vendor relationships or small amounts. State the term on the PO so the vendor cannot push for faster payment than agreed. If the vendor issued a quote with different terms, resolve that before issuing the PO - the PO overrides the quote terms once signed.
Should I include both ship-to and bill-to addresses?
Yes, always, even if they are the same. Ship-to is where the vendor delivers. Bill-to is where the invoice goes. For service work the ship-to is where the work happens or the account the service lands in (Deliver licenses to admin@acme.com). For physical goods it is the literal delivery address. Bill-to is almost always your AP address. Making them explicit on the PO prevents the common failure mode of the vendor sending the invoice to the wrong email and then claiming late fees because you never paid on time.
Is a purchase order legally binding?
Yes, once accepted. A PO is a binding offer from the buyer. When the vendor accepts it (explicitly with a signed acknowledgment, or implicitly by starting delivery), a contract exists for the scope, price, and terms stated. That is why the line-item detail matters: the vendor cannot substitute product or add fees not covered on the PO. Include a short acceptance clause (Acceptance of this PO constitutes agreement to the terms above) to remove ambiguity. Most commercial disputes with vendors resolve in favor of whichever party has the clearer PO paper trail.
Does this tool save my POs?
No. Every value you enter lives in memory for this browser tab only. Nothing is transmitted to a server, stored in a database, or synced across devices. Close the tab and the data is gone. The Download PDF button builds the file in your browser using jsPDF and saves it to your device; that file is the only record.
Operations is software, not spreadsheets.
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