Simplify Procurement With Free Purchase Order Template

What is a Purchase Order Template? 

A purchase order template is a predesigned form or document for formally requesting goods or services from a supplier.

Businesses typically rely on ERPs or accounts payable tools for purchase order creation, which consolidates key information like vendors, items, and GL codes onto a centralized platform.

However, for those using Excel sheets for procurement processes, a purchase order template is invaluable for standardizing documents and mitigating inefficiencies. It ensures consistent formatting with complete information, simplifying the order processing for procurement teams and vendors.

What is the Difference Between a Purchase Order and an Invoice?

While both purchase orders and invoices detail items and quantities with specific amounts to be paid, they serve different purposes in the transaction process.

A purchase order is a document from a buyer to a seller that specifies order details like items, quantities, prices, and terms agreed upon. It formally requests the supplier to deliver the specified goods or services.

An invoice is a document from the seller to the buyer issued after goods or services are delivered. It requests payment for the listed items, including prices, quantities, payment terms, taxes, and any discounts.

In essence, a purchase order acts as an agreement before goods/services are received, whereas an invoice is a request for payment after the goods are delivered.

What are the Benefits of a Purchase Order Template?

A purchase order template is valuable for companies that want to streamline their order creation process. Here's how it helps:

• Ensures uniformity in purchase requests, minimizing errors and confusion
• Streamlines purchasing by providing a structured format for ordering goods or services
• Reduces order errors with predefined fields for item details, quantities, prices, and delivery instructions
• Enhances adherence to legal requirements with customizable settings to include company policies and regulatory standards
• Creates a transparent record of purchase transactions, facilitating tracking, auditing, and compliance efforts
• Facilitates assigning responsibility for purchase requests and approvals
• Eliminates the need to create orders from scratch, especially with automated templates, saving valuable time
• Adaptable to evolving business needs, allowing easy customization and modification as necessary

How do I Create a Purchase Order Template?

To get started, download and customize this free purchase order template to fit your business requirements.

[Template]

However, if you prefer creating a custom template from scratch, here are the key components of the purchase order you must include:

1. Header information:some text
   • Purchase order number—Unique identifier for tracking
   • Issuance date of the purchase order
   • Vendor details—Supplier's name, address, and contact information
2. Order details:some text
   • Item description
   • Number of units/items ordered
   • Cost per unit
   • Total price—Calculated cost per line item
3. Additional information:some text
   • Terms and conditions—Agreed-upon terms, payment, and delivery instructions
   • Shipping information—Method, address, and instructions
   • Payment details—Terms, due date, payment methods, and taxes.
4. Company information:some text
   • Purchaser's name and address
   • Contact information—Person's name, email, and phone for correspondence
5. Notes or comments section:some text
   • Space for any special instructions or comments related to the order
6. Signature and approval section:some text
   • Signature lines for authorized approval
   • Date of approval

Furthermore, you can add more fields or sections to the template based on your organization's specific needs.

How Can I Use a Purchase Order Template?

Here's how you can get started with a purchase order template:

1. Customize for your business: Tailor the template to suit your business needs by adding company logos, adjusting field names, and entering vendor/ item details. Share this template with your teams to enable standardized purchase orders each time.
2. Fill in the required information: For each order, input the necessary details into the designated fields. This includes the vendor's name, item descriptions, quantities, prices, and special instructions or terms (if any). The Excel sheet will automatically calculate the total.
3. Download or print: Once you've filled in all the required information, generate the purchase order document. You can save it as a digital file (a PDF or Excel) or print it.

Finally, share the purchase order with the relevant stakeholders, including vendors, the procurement department, and the accounting team.

Properly maintaining purchase orders ensures timely processing, fulfillment, and payment. Additionally, it enables seamless goods received note (GRN) matching, compliance, and auditability.

Streamline Internal Processes With the Right Tools 

Creating a purchase order template simplifies the ordering process for the employees. They fill in the required details, and purchase orders are generated seamlessly. This reduces the chances of errors and improves vendor communication.

However, beyond procurement, consistent use of such tools and templates strengthens internal control over financial reporting (ICFR). Overall, such standardized procedures and regulatory compliance reduce the risk of financial errors and non-compliance.