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Download Purchase Order Excel Template

Download Purchase Order Excel Template

Ready-to-use Purchase Order Template in Excel, Google Sheet, and OpenOffice Calc to create your professional order form for small and medium-sized businesses.

This template can be useful for the purchasing department of companies, individual small and medium businesses, etc.

Table of Contents

  • What is a Purchase Order?
  • Types of Purchase Orders
    • Standard PO
    • Planned PO
    • Standing PO
    • Contract PO
  • Why a Purchase Order is Important?
  • Purchase Order Process
  • Purchase Order Template (Excel, Google Sheets, OpenOffice)
    • Contents of Purchase Order Template
  • Advantages of PO
  • Disadvantages of PO
  • Frequently Asked Questions

What is a Purchase Order?

As per Wiki,

A purchase order (PO) is a commercial document and first official offer issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

It is a buyer-generated document that states the requirements and serves as a legal document authoring a purchase transaction.

A purchase order describes the quantities, prices, discounts, payment terms, delivery date, date of shipment, other associated terms and conditions, and identifies a specific seller.

Types of Purchase Orders

There are 4 types of purchase orders. A business decides the type of PO on the nature of the purchase as well as the bindings and details in the PO.

The four types of purchase orders are as follows:

  1. Standard PO
  2. Planned PO (PPO)
  3. Standing PO (SPO)
  4. Contract PO (CPO)

Standard PO

Businesses mostly use Standard PO for their purchases. It consists of a detailed description of the order. This includes item description, quantity, price, delivery time, and delivery address.

Planned PO

Planned PO is similar to Standard PO. It doesn’t include the delivery time and details. Once the buyer places the order, the seller, later on, will confirm the delivery time and schedule of delivery. This PO is mostly used when the items are to be purchased in bathes.

Standing PO

A Standing PO is also called Blanket PO. It is a standing order in which the item is confirmed along with quantity, but doesn’t include prices. Business uses this type of PO when there are recurring purchases and the price of the commodity is subject to differ.

Contract PO

As the name suggests, it is more like a contract between the buyer and the seller. It consists of terms and conditions of purchase along with basic details of the nature of the purchase.

It doesn’t even include details of products and its price. Moreover, it includes the information on future PO’s that the buyer will issue against this CPO.

Why a Purchase Order is Important?

Issuance of a Purchase Order (PO) doesn’t mean a contract, but when accepted by the seller, it becomes binding between the buyer and the seller.

Generally, most companies use purchase orders. It allows them to communicate clearly and explicitly their intentions to the sellers. They help to protect the sellers when a buyer refuses to pay for the goods or services utilized.

Purchase Order Process

Usually, the business follows the following process for creating a Purchase Order:

  • The buyer evaluates the demand for goods/services.
  • A buyer then decides upon the quantity and the flow of supply of goods/services.
  • The buyer opts for a quotation from different suppliers.
  • Then, the buyer finalizes the supplier from which it wishes to buy the required goods/services.
  • A buyer issues the Purchase Order and sends the same to the selected supplier.
  • The seller reviews the purchase order and its terms & conditions so that they can confirm the fulfillment of the order.
  • Then, the seller approves the PO.
  • The supply of goods/services is made as per the PO.

Purchase Order Template (Excel, Google Sheets, OpenOffice)

We have created a Purchase Order Template with all predefined formulas. You just need to enter the Supplier’s information and product details.

Purchase Order Template

Excel Google Sheets Open Office Calc

Click here to Download All Accounting Excel Templates for ₹299.

Note: To edit and customize the Google Sheet, save the file on your Google Drive by using the “Make a Copy” option from the File menu.

Additionally, you can download other accounting templates like Petty Cash Book, Simple Cash Book, and Accounts Payable Excel Templates from here.

Let us discuss the contents of the Purchase Order Template in detail.

Contents of Purchase Order Template

This template consists of 3 sections: Header Section, Supplier Details Section, and Order Details Section

Header Section

As usual, the header section consists of a company logo, name of the company, company contact details(address, phone numbers, fax, email address, and website), and the Purchase order heading.

After the above details, it includes the date of order and the Purchase Order number or PO#.

Purchase Order Template

Supplier Details Section

Supplier details consist of the name of the supplier and the supplier’s address.

Purchase Order Template

The supplier details vary from company to company. Some include telephone numbers, fax numbers etc and some don’t.

Order Details Section.

The order details section is the main section of the purchase order template. It consists of the following subheadings:

Product code: If the buyer/seller has any predefined code then he must enter here or else leave it blank.

Product Description: Details of product/commodity etc.

Unit: Here you can define the quantifier of the product. It can be like kilograms, liters, tons, Boxes, or pieces.

Quantity: Enter the quantity you wish to purchase in the quantity column.

Price/Unit: In this column, you need to enter the price per unit.

Total: Total= Quantity X Price/Unit.

List down all the products/commodities you wish to purchase. Lastly, the template consists of the notes and the Final Total section. Final total consists of shipping, loading, and other miscellaneous charges.

In the Notes section, you can put any specific notes regarding the order.

Advantages of PO

  • Detailed overview of the purchase process.
  • It improves supply structure.
  • Timely delivery.
  • Serves as a contract between buyer and seller.
  • It helps in controlling the costs of ordered goods/services.
  • POs provide an overview of cash flow that will be required depending on the nature of supply.
  • Avoids unnecessary purchase of goods that lead to deadstock or loss.
  • POs are helpful in getting financial aid from commercial lenders or financial institutions. Currently, almost every financial institutions have many trade finance facilities that business people can avail against the purchase orders.

Disadvantages of PO

  • Adds unnecessary paperwork in small businesses for smaller purchases.
  • In bigger companies where purchases are made only after approval, it causes delays for even ad hoc purchases.
  • Small companies cannot afford additional staff for monitoring purchases.

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If you have any queries please share in the comment section below. I will be more than happy to assist you.

Frequently Asked Questions

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

The main difference between a PO and an Invoice is that PO is the binding of purchasing goods by the buyer to the seller on prescribed terms. Whereas an invoice is the legal binding of payment of the purchased goods/services.

Does a PO have a legal status?

PO has a legal status for both; the buyer and the seller. The buyer can use this PO as a legal document in case of non-supply of goods. Similarly, a supplier can also use this as a legal document in the court of law when a buyer refuses to purchase the confirmed PO goods or refuse to make payments.

What can we do to make our Purchase Order more effective?

Here are a few tips that will help you make your PO more effective:

  • Order in bulk quantities. This will help you lower costs.
  • Define terms properly to avoid discrepancies.
  • Maintain good relations with suppliers by making timely payments.
  • Communicate timely and in writing in case there is a change in your order structure.
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About Shabbir Bhimani

I have worked in Excel and like to share functional excel templates at ExcelDataPro.

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