Back to: Store Management SS 2
Welcome to today’s class!!
We are thrilled to have you in our class!!
In today’s Store Management class, we will be learning about Purchase Order
Purchase Orders
A purchase order is a commercial source document that is issued by a business’ purchasing department when placing an order with its vendors or suppliers.
In simple terms, a purchase order is that document that a business purchasing department – a department responsible for buying materials and equipment – gives out when there is a need to buy anything.
The document indicates the details on the items that are to be purchased, such as the types of goods, quantity, and price. In simple terms, it is the contract drafted by the buyer when purchasing goods from the seller.
Let’s consider the benefits of Purchase Orders
- Avoids Duplicate Orders
Purchase orders bring several benefits to a company. The most important is that it helps avoid duplicate orders. When a company decides to scale the business, POs can help keep track of what has been ordered and from whom.
Also, when a buyer orders similar products, matching the invoices can be difficult. The PO serves as a check for the invoices that need to be paid.
- Keeps Track Of Incoming Orders
In addition, Purchase Orders also called PO help keep track of incoming orders, and a well-organized purchase order system can help simplify the inventory and shipping process.
- Serves As Legal Documents
Purchase orders serve as legal documents and help avoid any future disputes regarding the transaction.
In summary, while the purchase order shows what goods were ordered from the supplier, the sales order is generated by the supplier and sent to the buyer. It signifies the confirmation or approval of the sale. Nowadays, the Purchase Order process is no longer paper-based, and the buyer usually sends its suppliers an electronic Purchase Order.
Evaluation
What is a Purchase Order
Reading Assignment
What is a Purchase Order used for?
Weekend Assignment
Explain three benefits of Purchase Order
We hope you enjoyed today’s class. In our next class, we will be talking about the Subsidiary Books.
Let us know your thoughts and questions in the comment section, and we will attend to them as fast as we can.
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