A commercial document issued by a buyer to a seller, detailing the merchandise or services the seller will provide to the buyer. Sending a purchase order to a seller constitutes a legal offer to buy products and services. A legal sales contract is formed when the purchase order is accepted. It will specify payment terms, delivery dates, item identification, quantities, shipping terms, and all other obligations and conditions.
A purchase order is often abbreviated as P.O. and a specific purchase order is usually identified by a P.O. number. P.O. numbers are helpful in aiding companies keep track of information about a specific transaction. P.O. numbers are not a universal standard and are usually only used within a company to keep track of it’s own operations.