A purchase order is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services that the seller will provide to the buyer. Sending a PO to a supplier constitutes a legal offer to buy products or services.
The three types of purchasing orders are:
- A regular purchase order is used for one time purchases of goods or services rendered.
- Receiving is required (three way matching) to pay invoices for goods or services rendered.
- A standing purchase order is used for goods or services are needed from a vendor on a regular basis, the standing order is used rather than issuing several regular purchase orders. The standing purchase order is obtained by requesting it on the purchase requisition.
- Receiving is not required to pay invoices for goods received or services rendered.
- A blanket purchase order a blanket purchase order is a long–term agreement between a company and its supplier. It can allow multiple releases against it at different times throughout a set time period. A "release" occurs each time a blanket purchase order quantity is fulfilled and invoiced against. This type of purchase order is used rarely. Purchasing will review and approve each department request on a case by case basis.
|P.O. Type||Purpose||Receiving (3-Way Matching) Needed||Funds Encumbered|
|Regular||Purchase of Goods or Services Rendered||Yes||Yes|
|Standing||Purchase of Goods or Services (Reoccurring)||No||Yes|
|Blanket||Purchase of Goods or Services (Reoccurring)||No||No|
For relevant forms, please visit the Forms page.