Definition of a Purchase Order
To obtain by paying money or it's equivalent.
Purpose of a Purchase Order:
The Purchase Order is the formal request from the buyer to the seller for the procurement of goods.The Purchase Order states the price, and delivery that the buyer is willing to purchase the goods.It also states the terms and conditions of sale, and the place to ship and invoice the goods and services. The Purchase Order reflects the price and terms quoted by the Seller. The Purchase Order should be issued by the buyer within the time frame stipulated in the Quotation from the seller; otherwise the seller is not obligated to comply with the terms of his Quotation.
Process for a Purchase Order:
Purchase Order is sent to the seller
Seller issues a Proforma Invoice and Letter of Credit Instructions to the buyer.
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Fields for a Purchase Order: | |
| 01 FROM (BUYER) | Seller providing the Purchase Order |
| 02 TO (SELLER) | Buyer Purchase Order sent to |
| 03 BILL TO (ACCOUNT) |
Remittance to account |
| 04 SHIP TO (ADDRESS) |
Address for goods to be shipped to |
| 05 NUMBER | Assigned number for reference |
| 06 DATE | Date issued |
| 07 QTO REF | QTO reference |
| 08 TERMS OF SALE | Letter of Credit, Direct Collection; Advance Payment |
| 09 SHIP VIA | Ocean, Air, Rail or Truck |
| 10 INCOTERM | FOB; CFR; or CIF |
| 11 L/C NO. | Letter of Credit number |
| 12 SHIP FM | Ship From commercial port |
| 13 SHIP TO | Ship To commercial port |
| 14 -- | blank |
| 15 ITEM NO. | Goods purchased Item Number |
| 16 DESCRIPTION | Goods description |
| 17 UOM | Unit of Measure |
| 18 QUANTITY | Quantity of Unit of Measure |
| 19 UNIT VALUE | Unit value in USD or local currency |
| 20 AMOUNT | QUANTITY X UNIT VALUE = AMOUNT |
| 21 SUBTOTAL | Total value of items |
| 22 TAX | Total TAX ON SUBTOTAL |
| 23 FREIGHT | Freight based on INCOTERM |
| 24 TOTAL | Total amount to be paid by Buyer |
| 25 USD$ | Amount in USD $ Dollars |
| 26 AUTHORIZED SIGNATURE |
Authorized Signature of Seller |
| 27 REMARKS | Remarks |
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