CreativeMinds Glossary

Purchase Order or PO is a business document that states the official offer from the seller to the buyer. It specifies the quantity, pricing and an overview of the product or service being purchased. When the buyer and seller agree and accept the proposed agreement stated in the purchase order, a contract is established between the parties. Creating a purchase order is the initial step in the purchase to pay process in an ERP (Enterprise Resource Planning) business management software system.

In an eCommerce business, purchase orders are referred to as electronic purchase orders due to the fact they are sent electronically. Some of the benefits of include:

• Reduction in printing costs.
• Speed and accuracy.
• Eliminate the use of hard copy purchase orders.
• Reduce errors.