A purchase order (PO) is a formal document a buyer sends to a seller requesting goods or services. It specifies what is ordered, the quantity, agreed price, and delivery terms. Once accepted, it becomes legally binding.
For example, if a restaurant needs 500 kg of rice, they issue a PO stating quantity, price per kg, delivery date, and payment terms. This protects both parties.
Purchase orders create a clear audit trail, help manage budgets, and prevent unauthorized spending.