Why use purchase orders
A purchase order (PO) is the buyer’s official order to a supplier. It states exactly what you are buying, at what price, by when and where to deliver it, and it shows that someone with authority approved the spending. When the supplier’s invoice arrives, you match it to the PO and the delivery note before paying. That “three-way match” is the simplest protection against paying for things you did not order or did not receive.
Even a small business benefits: a PO number on every supplier invoice makes bookkeeping faster, and suppliers deliver more accurately when the order is written down.
What to include
- A PO number and date.
- Your business details (the buyer) and the supplier’s details.
- Each item with quantity and agreed price. If a price is not confirmed yet, leave it empty and it shows as “To be confirmed”.
- The date you need the goods by and the delivery address (your business address by default).
- The supplier’s quote reference, and a budget or project code if your organisation uses them.
- Payment terms, delivery terms and invoicing instructions.
- “Prepared by” and “Approved by” signatures.
LPOs: local purchase orders
Many companies, schools, NGOs and government offices in East and West Africa call purchase orders LPOs. Change the number prefix to LPO- under Advanced settings, Numbering, and the title changes to “Local purchase order” automatically.
Saved suppliers
Every supplier you order from is remembered with their contact details, and items you have ordered before are suggested with their last price. Your second PO to the same supplier takes seconds.
When goods arrive
Turn the PO into a delivery note to record goods received, with what arrived and who signed for it. If goods are short or damaged, turn it into a debit note to claim from the supplier. To record the payment, use a payment voucher.
Common mistakes
- Ordering by phone and never writing it down, then disputing the invoice.
- No required-by date, so “soon” becomes “next month”.
- Not asking the supplier to quote the PO number on their invoice. SmallKits adds that wording by default.
A worked example
A small office orders supplies every month. The office manager creates PO-0031 to Office Supplies Direct: 10 boxes of copier paper, 4 toner cartridges and 6 desk organisers whose price has not been confirmed yet, so they show as “To be confirmed”. The budget code is ADMIN-2026. The manager signs “Prepared by” and the director signs “Approved by”. When the supplier’s invoice arrives quoting PO-0031, the accountant checks it against the PO and the signed delivery note and pays it with a payment voucher, all in a few minutes.
Purchase order checklist
- Is the supplier’s name exactly as it will appear on their invoice?
- Are quantities and units clear (boxes, reams, metres)?
- Is the price the one quoted, and is the quote reference on the PO?
- Is the required-by date realistic for the supplier?
- Is the delivery address and a contact person included?
- Has someone other than the requester approved it?
Purchase order terms explained
- PO number
- Your unique reference for the order; suppliers quote it on invoices.
- LPO
- Local purchase order: the name used in much of Africa.
- Required by
- The date you need the goods or services.
- Three-way match
- Checking the PO, delivery note and invoice agree before paying.
- Budget code
- The internal code the cost is charged to.
- To be confirmed
- A line whose price the supplier has not confirmed yet.
Using purchase orders consistently, even for small orders, gives you a clear record of every commitment you have made, which is invaluable when cash is tight or a supplier disputes a delivery.
Who uses purchase orders
Schools, NGOs, hospitals and government offices, which must approve spending before it happens; restaurants and shops ordering stock; construction firms ordering materials for a site; and any business that wants fewer surprises on supplier invoices.
Related free tools
- Free delivery note generator: to record goods received against the order.
- Free debit note generator: to claim for short or damaged supply.
- Free payment voucher generator: to record paying the supplier.
One more tip
Ask suppliers to confirm each purchase order by email or WhatsApp. A short “confirmed, delivering Friday” turns your order into a clear agreement and gives you a delivery date to plan around.
Updated 2026-10-29