Purchase order format
A purchase order is the document you will point at when the delivery is short, the rate is different or the goods arrive three weeks late. That is its real job, and it does it only if the terms are on it.
| Description | HSN | Qty | Rate | Amount |
|---|---|---|---|---|
| MS Angle 50×50×6 | 7216 | 4,000 | 54.20 | 2,16,800.00 |
| MS Flat 40×6 | 7214 | 1,200 | 51.80 | 62,160.00 |
- The words "Purchase Order" and a PO number
- Date, and the date by which delivery is required
- Your name, address and GSTIN
- The supplier’s name, address and GSTIN
- Description with HSN code, quantity, unit and rate
- Taxes, shown separately
- Delivery address and delivery terms
- Payment terms, including credit period
- Whether part deliveries are acceptable
- Authorised signature
The terms are the point
Anybody can write down a price. What protects you is the delivery date, whether part deliveries are acceptable, where the goods are to be delivered and who pays for freight — because those are the four things that go wrong.
Matching, later
A PO only earns its keep if what arrives is checked against it and the supplier’s bill is checked against both. That three-way match is what stops you paying for 4,000 when 3,800 came.
Keep it open
A part delivery should leave the order open for the balance rather than requiring a second order. Otherwise the outstanding quantity lives in somebody’s memory.
Purchase order questions
Is a purchase order legally binding?
Generally it becomes binding once the supplier accepts it, which is why the terms on it — delivery date, part deliveries, place of delivery, freight — matter as much as the price.
What is a three-way match?
Comparing the purchase order, the goods received note and the supplier’s bill. Where the three agree the bill can be passed; where they do not, the difference is visible before payment rather than after.
Should a PO show GST?
Yes, shown separately, so the committed value is unambiguous and the supplier’s bill can be checked against it without arithmetic.
What happens if the supplier delivers less than ordered?
The goods received note records what actually arrived, the order stays open for the balance, and if the supplier has billed the full quantity the mismatch is flagged when the bill is entered.
Related
Order, receive, match, pay
tBiz keeps the order open against what actually arrived and flags the difference.