How to create a purchase order in five steps
- Add your company. Name, address and logo, saved in this browser for next time.
- Add the vendor and ship-to. Who you buy from and where the goods should arrive.
- Set dates and terms. PO number, delivery date, shipping method, shipping terms such as FOB, and payment terms such as Net 30.
- List the items. SKU, description, quantity and agreed unit price. Totals update as you type.
- Approve and send. Download the PDF or Word file, sign it and email it to the vendor.
What is a purchase order?
A purchase order, or PO, is the document a buyer sends to a supplier to order goods or services at an agreed price. Once the vendor accepts it, both sides are committed: they deliver what is listed, you pay on the stated terms.
Purchase order vs invoice
The buyer issues the purchase order before delivery: "this is what we want to buy". The seller issues the invoice after delivery: "this is what you owe". A good invoice quotes your PO number. If you also sell, the invoice generator creates the other side of the deal.
How to number purchase orders
Use one simple, sequential format and never reuse a number. PO-0001, PO-0002 works for most small businesses. Larger teams add a year or department code, such as PO-2026-0148. Log every number you issue, including cancelled orders.
The 3-way match
Before you pay a supplier, compare the purchase order, the packing slip and the vendor invoice. Items, quantities and prices should agree on all three. If the invoice charges for 2,500 bags but you ordered and received 2,000, the PO is your proof. This check stops duplicate payments and price creep.
What to include on a PO template
- A unique PO number, the order date and the required delivery date.
- Buyer and vendor names, addresses and contacts.
- A ship-to address when goods go to a warehouse or job site.
- Item or SKU codes, descriptions, quantities, units and unit prices.
- Subtotal, discount, tax, shipping, other costs and the total in one currency.
- Shipping method, shipping terms and payment terms.
- Terms and conditions, and an approval signature.
Tips for smoother purchasing
Copy SKUs and prices exactly from the supplier quote. Put delivery hours in the special instructions, and ask for a signed acknowledgement on large orders. For services rather than goods, define the deliverables first with the scope of work generator, and track spending over the year with the financial statement generator. More free business tools are in the free generators hub.
FAQ
Is this purchase order generator really free?
Yes. No sign-up, no watermark and no limit. Files are built in your browser, so nothing is uploaded.
Is a purchase order legally binding?
A purchase order is an offer to buy. Once the vendor accepts it, in writing or by shipping the goods, it generally becomes a binding contract on the listed terms. For large orders, ask the vendor to sign the acknowledgement block.
What is the difference between a purchase order and an invoice?
The buyer sends a purchase order before delivery to place an order. The seller sends an invoice after delivery to request payment. The invoice should reference the PO number so both sides can match them.
Can I edit the purchase order in Word or Google Docs?
Yes. Download the Word (.docx) file and open it in Microsoft Word, Google Docs or Pages. Or use Copy to paste it into an email.
What do FOB and Net 30 mean on a PO?
FOB tells you where ownership and shipping risk pass from the vendor to you: at the vendor's dock with FOB Origin, or at your door with FOB Destination. Net 30 means the invoice is due 30 days after the invoice date.