If you have a big company, then you will need a purchase order or it is also known as Purchase Order or PO. Purchase Order is a document describing the detailed data about products or services. The seller will provide this kind of document to the buyer. This document contains the quantities of the product, type of products, type or services, and the prices that have been agreed by both sides.
The purchase order is an important document if your company is considered as a big company. Transaction among two people or two small groups of people who trust each other will not require this kind of document. Big company will need PO in every transaction they made because this document is the important part of the company system. There are some kinds of business fields that will require PO document; they are Design or Art Company, Programming or IT Company, Cleaning Service Company, and many more. For the service based company, the buyer will not pay according to the quantity or quality but according to the skill, time that needed to finish the job, and quality of the service. In the service based company, PO is a trusted reference to get the payment from their client.
Purchase Order document is very important because both sides have to agree with the content of this document before they can make an official contract. In other word, there will be no contract until this document is accepted by both the seller and the buyer. So if you have a plan to expand your business, make sure that you are ready with purchase order document.