Purchase order

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A purchase order (PO) is a commercial document and first official offer issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services. Acceptance of a purchase order by a seller 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.[1]

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

Background[edit]

Companies use purchase orders for several reasons:

  1. Before Shipment credit facility
  2. Post Shipment credit facility
  3. Trade Finance facility
  4. Foreign Bill Purchase credit facility
  5. Bill retirement credit facility
  6. Order Confirmation
  7. Followup

Electronic purchase orders[edit]

Many purchase orders are no longer paper-based, but rather transmitted electronically over the Internet. It is common for electronic purchase orders to be used to buy goods or services online for services or physical goods of any type.

But in LCD Local purchase Order in Paper form are commonly and highly used

See also[edit]

References[edit]

  1. ^ Dobler, Donald W; Burt, David N (1996). Purchasing and Supply Management, Text and Cases (Sixth Edition ed.). Singapore: McGraw-Hill. p. 70.