Purchase Order

A formal, legally binding document issued by a buyer to a seller authorizing the supply of specified products or services at agreed terms. The PO is the central document in B2B commerce — it creates a contract when the seller accepts it (by acknowledgment, delivery, or commencement of work). Essential PO elements: PO number (unique identifier for tracking), buyer and seller identification, product/service description (technical specification, part numbers, standards), quantity, unit price, total value, currency, payment terms (net 30, net 60, etc.), delivery date, delivery address and Incoterms, applicable taxes (IVA), references to quotation or supply contract, quality requirements (certificates, inspections), and any special conditions. In Mexico: the PO reference appears on the CFDI (invoice), creating the documented transaction chain for tax and audit purposes. PO discipline (no purchase without a PO, no receipt without a PO match) is fundamental to procurement control, budget management, and accounts payable accuracy. Electronic PO systems (ERP integration: SAP, Oracle, NetSuite) automate the process and provide real-time visibility. For industrial distributors: timely and accurate PO processing directly impacts customer satisfaction and cash flow.