Purchasing Order Definition

A purchasing order is a formal request to a supplier to provide goods or services. A PO is usually created after a buyer and seller have negotiated terms and conditions, and is used to document the agreed upon terms.

Purchasing orders are typically generated internally by buyers using electronic software, then transmitted electronically or via fax/mail to sellers. After receipt, sellers will usually acknowledge the PO to confirm they will be able to provide the requested goods or services.