The purchase order definition
A purchase order (also called a PO) is an official document prepared by the buyer with a list of products or services, quantities, and price that they want to purchase from the seller. The buyer will send these types of PO to the seller for confirmation. If the seller accepts the PO, it will become a legally binding document. Both entities can use the PO to track and manage the procurement process.
Nowadays, buyers can generate a PO via the seller’s available purchase order system or they can do it on their own system and send it via email automatically to the seller. The seller can create the invoices right on their system from the PO they stored in the system. For example, if you’re a retailer using a Magento Purchase Order system or a Magento ERP system, you can create a PO automatically right from your system and send it to the supplier.
The information on a PO often includes the list of items that a buyer would like to purchase, quantities for each item, and agreed-upon prices.