All 21 Purchase Orders & 3-Way Matching questions
More in Purchase Orders & 3-Way Matching
What is three-way matching? What is the difference between two-way, three-way, and four-way matching? What is a goods receipt note (GRN)? What is a requisition and how does it relate to a PO? What information does a purchase order typically contain? What is a contract or catalog PO versus a spot PO? What is matching tolerance and why is it used? What are common causes of a three-way match failure? How are partial deliveries and partial invoices matched against a PO? What is a blanket (standing) purchase order?
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Accounts Payable & Receivable › Purchase Orders & 3-Way Matching

What is a purchase order (PO)?

Beginner

Answer

A purchase order is a buyer-issued document that commits to buy specified goods or services at agreed quantities and prices from a supplier. It formalizes the order, sets the commitment for budgeting, and becomes the reference document that goods receipts and invoices are matched against in the procure-to-pay cycle.
Real-world example Procurement raises PO #4501 for 100 units at $25 each; the warehouse and AP later match deliveries and invoices to it.

Common follow-ups: What is the procure-to-pay cycle? | Who raises a PO?

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All 21 Purchase Orders & 3-Way Matching questions