Purchase order

Definition – Purchase order

A purchase order is a request to purchase specified goods or services for an agreed price from a seller. A purchase order only becomes a commitment once it is accepted by the seller.

When to issue a purchase order?

Issue a purchase order when a seller requires a formal commitment to purchase the goods or services before delivering the goods or providing the services.

Additional information

Not all purchases require the issue of a purchase order. Many purchases are made under other arrangements, such as a contract, and include:

  • phone and internet services
  • bank fees and charges applied to an account.