What is a Purchase Order?
A purchase order (PO) is a formal document sent by a buyer to a vendor or supplier, authorizing the purchase of specific goods or services. Unlike an invoice — which requests payment after delivery — a purchase order initiates the transaction by specifying what's being ordered, quantities, prices, and delivery expectations.
Purchase Order vs Invoice: What's the Difference?
Purchase Order
- Sent by the buyer
- Created before goods/services are delivered
- Authorizes a purchase
- Specifies what's being ordered
Invoice
- Sent by the seller
- Created after goods/services are delivered
- Requests payment
- Specifies what's owed
Why You Should Use Purchase Orders
Spending Control
Authorize purchases before they happen and prevent unauthorized spending
Legal Protection
POs serve as binding agreements between buyer and seller
Order Tracking
Track what's been ordered, what's been delivered, and what's still pending
Audit Trail
Maintain a clear paper trail for accounting and compliance
Step-by-Step: How to Create a Purchase Order
1 Set Up Your Business
Before creating a purchase order, make sure your business details are configured:
- Business name and address
- PO number prefix and sequence (e.g., "PO-0001" or just "0001")
- Shipping addresses for your locations
- PDF filename preferences
Tip: On Invoice Website, you can configure PO number settings and shipping addresses per business in Manage Businesses.
2 Select Your Business and Vendor
Every purchase order needs two parties:
- Your business: The buyer placing the order
- The vendor: The supplier fulfilling the order, including their name, email, and address
3 Set the Ship-To Address
Choose where the order should be delivered:
- Same as Business: Ship to your main business address
- Saved addresses: Pick from your warehouse, job site, or other saved locations
- New address: Add a new shipping destination and save it for future use
4 Add Line Items
List each item you're ordering with:
- Quantity: How many units you need
- Description: What you're ordering
- Rate & Amount: Unit price and line total (optional — you can omit prices for internal POs)
- Custom columns: Add as many extra columns as you need (e.g., Part #, SKU, Color, Size)
Tip: Use the Omit Prices toggle when you only need to communicate quantities and descriptions — perfect for internal requisitions or when pricing is pre-agreed.
5 Set Dates and Delivery Expectations
Include key dates on your purchase order:
- Order Date: When the PO is issued
- Expected Delivery Date: When you need the items
- Shipping Method: Preferred carrier or delivery method (e.g., FedEx Ground, pickup)
6 Add Payment Terms and Notes
Optionally include:
- Payment terms (Net 30, Net 15, Due Upon Receipt, etc.)
- Discounts or tax information
- Special instructions or notes for the vendor
7 Review, Save, and Download
Before sending your purchase order:
- Review the live preview on the right side of the form
- Verify the PO number, items, quantities, and totals
- Click Save & Download PDF to generate a professional PDF document
- Send the PDF to your vendor via email
Using Custom Columns
One of the most powerful features of purchase orders on Invoice Website is custom columns. You can add as many extra columns as you need to your items table:
- Part Number — reference manufacturer part numbers
- SKU — track internal stock keeping units
- Color / Size — specify product variations
- Location — indicate where items should be delivered within a facility
- GL Code — attach accounting codes for internal budgeting
Custom columns can be reordered by dragging them, and each column appears on both the form and the PDF output.
Best Practices for Purchase Orders
Use Sequential PO Numbers
Configure a PO number prefix (e.g., "PO", "ORD", or your business initials) in your business settings. Sequential numbering makes it easy to reference orders in emails, track deliveries, and reconcile invoices against the original purchase orders.
Be Specific with Descriptions
Vague item descriptions lead to incorrect deliveries. Include:
- Exact product names and model numbers
- Specifications (size, color, material)
- Brand preferences if applicable
- Acceptable substitutions (or "no substitutions")
Match POs to Invoices
When the vendor's invoice arrives, compare it against the original purchase order. This three-way matching process (PO → delivery receipt → invoice) catches billing errors, prevents duplicate payments, and ensures you only pay for what you ordered and received.
Save Shipping Addresses
If you ship to multiple locations (warehouses, job sites, client offices), save each address so you can quickly select it on future orders. This prevents typos and speeds up the PO creation process.
Common Purchase Order Mistakes to Avoid
- No PO number: Makes it impossible to reference or track the order
- Wrong shipping address: Delays deliveries and causes confusion
- Vague descriptions: The vendor may ship the wrong items
- Missing delivery date: Without a deadline, there's no accountability
- No payment terms: Leads to disputes about when payment is due
- Skipping the review: Always check the preview before sending
Get Started with Purchase Orders
Ready to Create Your First Purchase Order?
Purchase orders are available on Basic and Premium plans. With features like custom columns, saved shipping addresses, flexible PO numbering, and professional PDF output, you can create polished purchase orders in minutes.
Ready to streamline your procurement? Create a Purchase Order now, or upgrade your plan to unlock this feature.