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Purchase Order

What is a Purchase Order?

A purchase order (PO) is a document that is used in business-to-business transactions to place an order for goods or services. It is issued by a buyer to a seller and specifies the items or services that are being purchased, as well as the terms of the purchase, such as the price, delivery date, and payment terms.

A purchase order serves as a legally binding agreement between the buyer and seller and is typically used to formalize and track the purchase of goods or services. It can also be used as a record of the transaction for accounting and tax purposes.

To create a purchase order, the buyer typically provides the seller with a list of the items or services that are needed, along with any relevant specifications or requirements. The seller then prepares a quote or proposal, outlining the terms of the sale, and the buyer reviews and approves the proposal. Once the proposal has been approved, the seller issues a purchase order to the buyer, which the buyer signs and returns to the seller to confirm the order.

Purchase orders are often used in larger, more complex transactions, and can help to ensure that both the buyer and seller are clear on the terms of the purchase and are held accountable for meeting their obligations.


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