Purchase Orders
A Purchase Order (PO) is a formal procurement document issued to a supplier.
It defines what the organization intends to purchase, from whom, at what agreed price, and under what purchasing conditions.
Core Components
A Purchase Order typically contains:
Vendor/
Purchase Order number
Order date
Destination store
Requested items
Quantity
Unit price
Tax
Additional charges
Total amount
Expected delivery date
Payment terms
Purchase Order Lifecycle
The Purchase Order follows a controlled lifecycle from preparation through delivery and receiving.
Purchase Order Statuses
Status | Description |
|---|---|
Draft | The Purchase Order is being prepared and has not yet been approved. |
Approved | The Purchase Order has passed the required approval process. |
Issued to Supplier | The approved Purchase Order has been sent or released to the supplier. |
Waiting for Delivery | The order has been issued and the organization is waiting for the supplier to deliver the goods. |
Partially Delivered | Some of the ordered items have been received, but the complete order has not yet arrived. |
Completely Delivered | All expected goods have been received and verified. |
Payment Status
Payment status is tracked separately from delivery status.
Status | Meaning |
|---|---|
Not Billed | A supplier bill has not yet been recorded. |
Billed | The supplier bill has been recorded. |
Partially Paid | Part of the outstanding amount has been paid. |
Paid | The outstanding amount has been fully settled. |
Purchase Order Workflow
1. Create a Draft
The procurement officer creates the Purchase Order using the approved procurement requirement.
At this stage, the Purchase Order can be reviewed and corrected before approval.
2. Submit for Approval
Once the Purchase Order is complete, it is submitted for approval.
The Purchase Order should not be issued to the supplier while it is still awaiting approval.
3. Approve the Purchase Order
An authorized user reviews the Purchase Order and approves it.
After approval, the Purchase Order becomes available for supplier processing.
4. Issue to Supplier
After approval, the Purchase Order is issued to the selected supplier.
The supplier can then process the order and prepare the goods for delivery.
5. Wait for Delivery
The Purchase Order enters Waiting for Delivery.
The procurement team can monitor the expected delivery date and follow up with the supplier when necessary.
6. Receive the Goods
When the supplier delivers the goods, the receiving team creates a Goods Receiving record.
The received quantities are checked against the Purchase Order.
7. Complete the Order
The Purchase Order becomes Completely Delivered when all expected items have been received and verified.
If only part of the order is received, the Purchase Order remains Partially Delivered.
Expected Result
A completed Purchase Order provides a controlled link between: