Purchase Order Processing Definition
A purchase order (PO) is a document that a company uses to order goods or services from another company. The PO indicates what the buyer intends to purchase, how many units they intend to purchase, and at what price. The PO also typically includes the delivery date and terms of payment.
Once the PO is issued, the seller will begin work on fulfilling the order. Once the goods or services are delivered, the buyer will be invoiced for the total amount due, minus any discounts or rebates. The buyer then has a set period of time to pay the invoice in full.
Purchase order processing is the term used to describe all of the steps involved in completing a purchase transaction, from issuing the initial PO to receiving and paying the final invoice. Purchase order processing can be completed manually or through automated systems.
