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.
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.