Purchase Order

Purchase Order

A purchase order (PO) is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services the seller will provide to the buyer. Sending a purchase order to a supplier constitutes a legal offer to buy products or services. Acceptance of a purchase order by a seller usually forms a contract between the buyer and seller, so no contract exists until the purchase order is accepted. It is used to control the purchasing of products and services from external suppliers.

Creating a purchase order is typically the first step of the Order-to-cash process in an ERP system.

Read more about Purchase Order:  Background, Electronic Purchase Orders

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