Purchase order format

Why issue a PO at all

Many small businesses still order on a phone call. That works until a supplier sends the wrong grade, bills a higher rate, or a staff member orders stock nobody approved. A purchase order fixes the item, quantity, rate and delivery date in writing before anything moves.

The PO also helps at the other end. When the goods arrive, the store checks them against the PO; when the bill comes, accounts match it against the PO and the goods received. This three-way match catches most purchase errors before payment.

Sample purchase order format

The sample uses made-up details. Switch between the Classic, Modern and Compact layouts, Print / PDF it on A4, or print a Blank template to fill by hand. Open in editor loads it into the free purchase order generator, where you type straight onto the page and GST, totals and the amount in words are worked out for you.

What to put on it

• Buyer name, address and GSTIN
• Delivery address
• PO number and date
• Supplier name, address and GSTIN
• Item description, specification and HSN
• Quantity and unit
• Agreed rate and discount
• GST rate and amount
• Total PO value
• Delivery date or schedule
• Freight and packing terms
• Payment terms
• Quality or inspection conditions
• Authorised signature

What a purchase order should contain

• Your company name, address, GSTIN and the delivery address.
• PO number and date, from your own series (PO/26-27/0088).
• Supplier name, address and GSTIN.
• Item lines: description, specification or brand, HSN, quantity, unit, agreed rate, discount and GST rate.
• Delivery date or schedule, and who pays freight.
• Payment terms, such as 30 days from receipt of goods and invoice.
• Quality, packing and inspection conditions, if any.
• Instruction to quote the PO number on the invoice and challan.
• Authorised signature.

No GST rule prescribes a PO format. It is a commercial document, so add whatever conditions matter in your trade. See also our guide to the purchase order format.

Worked example

A garment unit in Tiruppur orders yarn from a spinning mill in Erode, both in Tamil Nadu.

Both parties are in Tamil Nadu, so the PO shows CGST and SGST. The GST rate used here is for illustration; confirm the current rate for the item. The mill's invoice must then show the same rates; if it does not, accounts raise it before paying.

Partial deliveries and amendments

Large POs are often delivered in parts. Keep a running balance: ordered 800 kg, received 500 kg, pending 300 kg. If the rate or quantity changes, issue an amended PO (PO 88 R1) and tell the supplier in writing, instead of changing the figure by hand on the old copy. Close a PO once it is fully received or cancelled, so old open orders do not sit in your pending list forever.

PO, sales order and invoice

The same deal looks different from each side. Your PO is the supplier's sales order. The supplier's tax invoice is your purchase bill. The sales order vs purchase order guide explains the pairing.

In TallyPrime, a PO is entered as a Purchase Order voucher. The Receipt Note records goods received against it, and the Purchase voucher records the supplier's bill. Tally's order outstanding reports then show what is still due to come in.

Who should approve a PO

Set a simple rule that everybody knows. For example, the store manager can raise POs up to ₹50,000 for regular items at last purchase rate; anything larger, a new supplier or a higher rate needs the owner's approval. Write the approver's name on the PO. With that one rule, most surprise purchases stop, and the owner sees every large commitment before it is made rather than when the bill arrives.

Common mistakes

• Rate written without saying whether it includes GST or freight.
• No delivery date, so delays cannot be questioned.
• POs issued by phone and typed later, after the goods have come.
• Supplier's invoice not quoting the PO number, making matching slow.