Purchasing & suppliers
Purchase Order (PO)
By the Supply Chain Manager team · Updated October 16, 2026
A purchase order (PO) is the buyer's formal document to a supplier listing the items, quantities, prices, delivery date and terms being ordered.
Once the supplier accepts it, a PO is a commitment on both sides. It is also the record that later checks run against: what arrived at receipt and what was billed on the invoice.
For planning, an open PO is supply on the way. It belongs in inventory position from the day it is placed until the goods are received or the order is cancelled.
Purchase order example
Illustrative: PO 10482 to a supplier for 480 units of SKU ELC-2006 at $4.10, expected in 8 days, net 30 payment terms, delivering to the central warehouse.
Why purchase order matters for distributors
Clean PO data, especially order date, expected date and received date, is what makes supplier on-time performance, cycle time and price variance measurable at all.
Common purchase order mistakes
- Leaving the expected date blank, so lateness can never be measured.
- Not closing short-shipped or cancelled POs, which keeps phantom supply in the plan.
- Ordering by phone or email with no PO, so nothing can be matched later.
Purchase order in Supply Chain Manager
Supply Chain Manager can draft purchase orders from its reorder suggestions and tracks each PO's order, expected and received dates.
Open the live demoExamples on this page use made-up round numbers to show the calculation. They are not benchmarks or results from real businesses.