What Should a Purchase Order Include? (Free Template)

A purchase order should include a unique PO number, the date, your business and the supplier's names and contacts, where to deliver and by when, and one line per item with the supplier's code, the quantity, the unit it's sold in, the agreed price and a line total, followed by freight, tax and the total. Add the payment terms, who ordered and who approved it, and a note asking the supplier to quote the PO number on the packing slip and invoice. A PO turns "can you send the usual?" into a written record of what you agreed, which is what you check the delivery and the invoice against. Below is each field, a numbering scheme, an example that catches a $410 invoice mistake, and a free template.

The short version

• PO number, order date, deliver-by date.
• Your name, the supplier's name and contact, ship-to and bill-to addresses.
• One line per item: description, supplier code, quantity, unit, unit price, line total.
• Freight, tax and the total, so nothing is added later by surprise.
• Payment terms, delivery terms, who ordered it and who approved it.
• Notes: quote the PO number, mark lots and dates on cartons, warn before changing anything.
• Check every delivery and invoice against it before you pay.
• TaroStack makes POs from your reorder list, with approval, prices and receiving built in. More below.

Every field, and why it's there

The unit is where small-business POs most often go wrong. "10 pouches" and "10 cartons of pouches" differ by a factor of a thousand, and a supplier will happily read it whichever way their system does. Write the unit as the supplier sells it, every time.

A numbering scheme that lasts

A PO number only has to be unique, but a little structure helps: a short prefix for your business, the year, and a running number, like WR-2026-0142. Never reuse a number, even for a cancelled order; mark it cancelled instead. If you buy for more than one site, some businesses add a site code (WR-K-2026-0142 for the kitchen), which makes the delivery easy to sort at the door.

Approval, without slowing everything down

You don't need a sign-off on every bag of salt. Set a threshold: anyone who buys can send an order up to, say, $500, and anything above it needs the owner's okay before it goes. That catches the 10,000-pouch order typed as 100,000 without making the person reordering flour wait for a reply.

The example: checking the delivery and the invoice

Here's the order, from the template:

The delivery arrives with 9 cartons of pouches, not 10. Then the invoice arrives for $3,780.00: all 10 cartons, labels at $45.00 a roll instead of $40.00, and freight at $155.00. Checked against the PO and what came through the door, what you owe is:

Pouches     9 × $310.00   = $2,790.00
Cartons     2 × $127.50   =   $255.00
Labels      6 × $40.00    =   $240.00
Freight     as agreed     =    $85.00
Owed                        $3,370.00   (invoiced $3,780.00, $410.00 too much)

Checking the order, the delivery and the invoice against each other is called a three-way match, and it's the reason to write a PO at all. Without one, the $410 is a phone call where it's your memory against their system. Receiving is the middle step, and a food receiving log is a good place to note the short carton.

Get the template

Download the purchase order template and PO log. The PO sheet has every field above, lines that total themselves, and the three notes; it prints on one page. The PO log has one row per order, with the delivery and invoice beside it, and tells you whether they match; anything that doesn't turns red. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

When to send the order

The PO's deliver-by date only works if the order goes out early enough. That's the supplier's lead time, worked out from how long their deliveries have taken in lead time calculation, and the stock you need to last until it arrives, which is the reorder point.

Where this stops working

A PO template is a document, and documents don't talk to each other. The reorder decision is in one sheet, the PO is a second file, the delivery is a note on a clipboard, the invoice is an email, and the PO log is a third sheet someone updates when they remember. Prices are typed from last month's quote. Nobody notices the labels went up $5 a roll until the third order. And when the short carton finally turns up a week later, nobody's sure whether it was invoiced already.

How TaroStack does it

In TaroStack the purchase order is one record, from the moment you decide to buy to the day you put the stock away.

Orders start from what you need. The reorder list shows every item in days of cover at the rate it's really going out, with a red line where an order placed today would arrive too late, and reorder points suggested from how stock actually moves. Order a whole supplier's worth in one go, and each line arrives on the PO with the supplier's price from their price list, in the unit they sell in. Suppliers carry their lead times, payment terms, minimum orders and contacts, so the PO is filled in before you've typed anything.

Approval is built in. Orders above a threshold you set wait for approval, and once approved, the PO is sent to the supplier or printed. Every change is recorded with who, when and why.

Receiving is against the order. At the door, open the PO and receive what came: 9 cartons, not 10. Scan the supplier's GS1 case label and the lot and use-by date fill themselves in. Over-receiving is caught and flagged, a goods-received note prints for the paperwork, and the short line stays open until the last carton lands, or you close it short. Freight and other landed costs spread across what arrived, so each pouch carries its share and your stock value is honest. And a delivery with no order behind it can still be received.

And price creep has a report. TaroStack tracks what you pay each supplier over time, so the labels creeping from $40 to $45 show up in buying costs and price creep the first time, not the third. It also compares each supplier's promised lead time with how long their deliveries take in practice.

Purchase orders, approval, receiving and the reorder list are on every plan, from $49 a month. The first 30 days are free, with no credit card, and your suppliers and their price lists import from a spreadsheet or a photo of the list. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

What are the required parts of a purchase order?

A unique PO number, the date, the buyer and supplier, the delivery address and date, and a line for each item with its quantity, unit and price, then freight, tax and the total. Payment terms and who approved it are worth adding.

Who creates the purchase order, the buyer or the seller?

The buyer. The PO is your offer to buy at those quantities and prices; the supplier's order confirmation and invoice should match it.

Does a small business need purchase orders?

Not for every bag of salt, but for anything large, printed or from a new supplier, yes. A PO is what you check the delivery and invoice against, which is how a short delivery or a price change gets caught before you pay.

What is the difference between a purchase order and an invoice?

The purchase order comes from you and says what you're buying and at what price. The invoice comes from the supplier and says what they're charging. Comparing the two, along with what arrived, is how you know what you owe.