# What is a purchase order form and how does it relate to invoicing?
A purchase order (PO) form is a commercial document issued by a buyer to a supplier authorizing a purchase transaction. The PO becomes a legally binding contract when accepted by the supplier. Key elements: PO number (unique identifier), buyer information (company, address, contact), supplier/vendor details, order date, required delivery date, shipping address, billing address, itemized list (product/service descriptions, quantities, agreed prices), total amount, payment terms, special instructions, and authorized signature. Purchase orders relate to invoicing through the "Procure-to-Pay" cycle: (1) Buyer issues PO to supplier; (2) Supplier accepts PO and fulfills order; (3) Supplier ships goods and sends delivery receipt; (4) Supplier issues invoice referencing PO number; (5) Buyer performs 3-way matching (PO, receipt, invoice); (6) Invoice approved and paid if everything matches. Benefits of PO system: budget control (commitments tracked), prevents unauthorized purchases, simplifies invoice matching and approval, provides audit trail, clarifies order specifications, reduces disputes. Many organizations require PO numbers on invoices for payment processing. Modern procurement systems generate POs automatically from approved requisitions and integrate with invoice processing for touchless matching.
## Key Takeaways
- A purchase order (PO) form is a commercial document issued by a buyer to a supplier authorizing a purchase transaction.
- The PO becomes a legally binding contract when accepted by the supplier.
- Key elements: PO number (unique identifier), buyer information (company, address, contact), supplier/vendor details, order date, required delivery date, shipping address, billing address, itemized list (product/service descriptions, quantities, agreed prices), total amount, payment terms, special instructions, and authorized signature.
## Related Topics
- purchase order form
- purchase order template
- PO form
- what is purchase order