A purchase order (PO) is a written record that locks in exactly what you ordered, at what price, before any money changes hands.It’s a document sent to vendors to request goods or services, detailing items, quantities, prices, and payment terms. It’s the written order before the invoice arrives, ensuring both parties are aligned.

The PO protects you, keeps your vendor honest, and gives you a paper trail. The invoice is the vendor asking to get paid, but the PO is you saying exactly what you agreed to buy in the first place.

Here are four reasons why you should use POs:

  1. Tracking: A PO gives every order a number, so you can follow it from request to delivery.
  2. Clear communication: The vendor sees precisely what you want, which means fewer errors in shipment.
  3. Paper trail: It gives your vendor the specs of what you want in writing.
  4. Legal protection: A PO is a binding agreement. It prevents price hikes, blocks duplicate orders, and creates an audit trail if anything ever goes wrong.

Here’s a simple rule for when to use a PO: If the order is large, recurring, or you’re buying from a new vendor, send a PO. If you’re buying a low-cost item from a supplier you trust, you can skip it. The bigger the dollar amount, and the more people an order touches, the more a PO can save you. When it doubt, write it down.

QuickBooks lets you create, send, and track POs.