Purchase order
A purchase order is the buyer's commitment to pay for specific goods or services. Sometimes it is the only commercial document there is.
Commitment: Carries the money and the dates. The only role counted in spend.
Key takeaways
- Count a purchase order in spend when it is the commitment.
- Avoid counting it twice when it repeats an order form or statement of work.
- Record the vendor terms it references, if any.
When is the purchase order the commitment?
When no other commercial document exists, the purchase order carries the money and the dates.
When it only mirrors an order form for internal approval, record it with the order form rather than as a second commitment.
What to record
- Amount and currency
- Delivery or service dates
- Referenced terms
Frequently asked questions
Do purchase orders renew?
Usually not. They cover a defined purchase and end when it is delivered.
General working knowledge about commercial contracts, not legal advice. Your own agreement governs.