Purchase Order (PO)

What a purchase order includes

A PO carries a PO number, the buyer and ship-to addresses, line items with SKU or GTIN, quantity, unit price, requested ship and delivery dates, and payment terms. The PO number threads through the whole order-to-cash cycle: the acknowledgment, the advance ship notice, the invoice, and the three-way match all reference it.

Paper, email, and EDI purchase orders

Large retailers send purchase orders as EDI 850s straight into your system. Smaller buyers still send POs by email, PDF, or spreadsheet, which is where manual keying and errors creep in. Handling EDI and document orders in one pipeline keeps every PO structured and out of someone's inbox.

Types of purchase orders

Buyers use different PO types depending on how much they know about quantities and dates up front.

Purchase order example

A typical B2B purchase order carries these fields. The values below are an illustrative example.

• PO number: 4500118273
• PO date: 2026-09-14
• Buyer: Example Foods Co., Accounts Payable
• Ship-to: Distribution Center 6094
• Line 1: 120 CS of item GTIN 10012345678902 at $18.40 per case
• Requested delivery date: 2026-09-28
• Payment terms: 2% 10, Net 30
• Freight terms: FOB destination, freight prepaid
• Authorized by: Purchasing Manager

The purchase order lifecycle

Each step after the PO references the PO number, which is why a wrong or missing PO number causes invoice rejections downstream.

• The buyer raises and approves the PO, often from a purchase requisition.
• The PO goes to the supplier as an EDI 850, an email, or a PDF.
• The supplier enters it as a sales order and confirms it with an acknowledgment (EDI 855).
• Any change to quantities or dates goes out as a PO change (EDI 860).
• The supplier ships and sends an advance ship notice (EDI 856).
• The supplier invoices (EDI 810).
• The buyer runs a three-way match of PO, receipt, and invoice, then pays, often with remittance advice (EDI 820).