Free Purchase Order Template for Excel
You may wonder how our free purchase order template for Excel will make a difference in your business. This article will provide you with everything you need to know about purchase orders, including how they work and why they are important.
In the sections below, we’ll go over a few topics and answer some common queries about purchase orders. You can easily navigate and jump to any section you wish to explore :
- What is the function of a purchase order?
- The steps involved in ordering.
- How can you benefit from using purchase orders?
- Correct layout of a purchase order?
- The kinds of purchase orders are available?
- What is the difference between a purchase order and and an invoice?
- The difference between a purchase order and a sales order?
Download our FREE Purchase Order Template for Small Business owners and Individuals
Need to send a purchase order to your suppliers? Download our CFO360 purchase order template to send to suppliers to purchase goods. It’s easy to use and can be edited to suit your company’s brand.
Download FREE Purchase Order Template
– Easy to use
– Customise to your brand
– Send to suppliers
A purchase order is an official document that is generated by a company’s buying division when placing an order with suppliers for goods or services. In addition, it displays important details of the goods on order, for example, the kinds of goods, the total that needs to be ordered and the cost.
Simply put, it is the agreement between the buyer and the seller.
The steps involved in ordering :
1. The buyer generates a purchase requisition.
The first step in the ordering process is to generate a purchase requisition. The company’s buying division creates this form and its purpose is to keep a record of the products or services on order. In addition, it also assists the company to keep a record of expenditures. The buyer generates the purchase order once management accepts and allows the purchase requisition.
2. Then, the buyer generates a purchase order.
The buyer gives every purchase order a different order number, which serves a dual purpose. It is to make sure that the products or services ordered are the same as what they have received and in addition; it is used to make sure that the invoice and purchase order numbers are the same and that the buyer pays the correct total due.
3. The seller approves or declines the purchase order.
There is space on the purchase order form for the management department of the seller to sign and approve the order. The buyer records all the relevant information on the purchase order about the deal and what the buyer will get. The seller reserves the right to approve or decline the purchase order. However, as soon as the seller approves the order, it becomes a legally binding document for both the seller and the buyer alike.
4. The buyer documents the purchase order.
Now that the buyer has placed the order, the purchase order stays open. An open purchase order shows that the goods have not been delivered. In addition, it can show that the supplier has delivered only a certain portion of the order. Therefore, it shows that the supplier has not delivered all the goods yet and that the order is incomplete.
Beware of little expenses. A small leak will sink a great ship.
– Benjamin Franklin
How can you benefit from using purchase orders?
Purchase orders can be beneficial for buyers and sellers alike.
– It prevents the duplication of orders.
The most valuable aspect of a purchase order is that it prevents order duplication. Purchase orders keep a record of which supplier you have ordered from and what needs to be delivered. If the buyer places orders for the same kinds of goods, it is hard to match the invoices. In addition, a purchase order is a reminder that the invoices have to be settled.
– It records all new orders.
Purchase orders help keep a record of new orders that arrive. An efficient purchase order structure can assist to streamline the buying process.
– A purchase order is a legal document.
Purchase orders can assist to prevent any legal conflicts regarding the deal.
Here we discuss the correct layout of a purchase order :
Steps to follow when completing our free purchase order template for excel :
- Header – Supply all your company’s information, start by filling in your company name and your physical address. It is also very important that you always include a unique order number and the date of the purchase order.
- Supplier details – Complete all the relevant details of the supplier. Provide the name of the supplier, their physical address, their contact number and the name of the contact person.
- Deliver to – It is necessary to know the address and details of where a package should be delivered to. This includes which shipping terms and method are appropriate, as well as the expected arrival date.
- Order information – List every stock item on the document as a line item, including the item product code, the item description and the quantity on order. You will include pricing as well. Remember to add the delivery date info too so customers know when they should expect their package in hand.
- Summary – To help you complete the purchase order, there is a simple subtotal line where you can calculate any applicable discounts and taxes. Finally, click “total” at the bottom of this window to find out your grand total.
Free Purchase Order Template for Excel screenshot images below :
What kinds of purchase orders are available?
Standard
One of the most popular and common types of purchase order is a Standard Purchase Order. The buyer can identify what they’re buying, how many of them there will be, when they’ll get it delivered by, and for how much money this is all happening with no confusion or miscommunication from either party involved in the transaction.
Planned
A planned purchase order ensures your business has just what it needs without wasting money on excess stock of expensive items or running low due to lack of planning. You get to choose what you want in advance and have multiple options including pricing details and conditional information like the estimated arrival date.
Blanket
With a blanket purchase order, buyers can negotiate discounted pricing by purchasing large quantities of an item from retailers or wholesalers through collective bargaining power.
Contract
A contract purchase order is the best way to ensure that everyone involved has a good understanding of what will happen before anything can take place. The buyer and seller sign on an agreement outlining the terms, which then gets referenced for future use in a purchase order. In addition, this type of arrangement offers more legal protection than other types because all people are aware from day one how they’ll be protected legally.
What is the difference between a purchase order and an invoice?
- The buyer creates a purchase order that is used to order services of goods from the supplier.
- The supplier creates the invoice, which displays the amount that the buyer must pay for the goods purchased.
- The purchase order is the agreement of the transaction, whilst the invoice is the verification of the transaction.
What is the difference between a purchase order and a sales order?
- The purchase order lists the goods and the services ordered.
- The supplier creates a sales order which is given to the buyer.
- The sales order serves as a confirmation of the authorization of the transaction.
