A purchase order is a small document that prevents a lot of expensive mistakes — wrong quantities, surprise prices, and bills you cannot verify. Managing purchase orders properly gives you control over what you buy, what you receive, and what you pay. Here is how the process works and how to run it well.

What is a purchase order?

A purchase order (PO) is a document you send a supplier that specifies exactly what you are ordering: items, quantities, agreed prices, and delivery details. It is a formal record of the deal, so both sides know what was agreed before goods and invoices change hands.

Why purchase orders matter

Without POs, buying is informal and error-prone. With them you get a paper trail that lets you check deliveries against what you ordered, verify supplier invoices before paying, control spending, and keep accurate records for accounting and stock.

The purchase order process

  1. Create the PO with items, quantities and agreed prices.
  2. Send it to the supplier for confirmation.
  3. Receive the goods and check them against the PO.
  4. Match the supplier invoice to the PO and the delivery (a "three-way match").
  5. Pay once everything agrees — see tracking supplier payments.

Best practices

  • Confirm prices and payment terms on the PO to avoid disputes.
  • Check deliveries against the PO before accepting them.
  • Record your full landed cost, including freight and duty, against received goods.
  • Never pay an invoice that does not match a PO and a delivery.

Connect POs to inventory and accounting

The real value comes when receiving a PO updates your stock and your payables automatically. RushFlow manages purchase orders end to end — create, receive, match and pay — updating inventory and accounts as you go, so buying is controlled and your numbers stay accurate.