Purchase Order

A PO or Purchase order is a financial or commercial document given by the purchaser to the seller, indicating quantities, types and agreed rates for the services or products the seller would give to the purchaser or buyer. Sending a purchase order to the suppliers represents an authorized offer in order to purchase products and/ or services. Acceptance of the purchase order by a seller generally forms the one-off agreement between the purchaser and seller, therefore no agreement exists until the purchase order is accepted. There are many reasons why business organizations and other entities utilize purchase orders. Purchase orders allow the purchasers to explicitly and clearly communicate their purposes or intentions to the sellers and the sellers are protected, if the purchaser fails to pay the amount for the goods and/ or services. Purchase orders also help the buying agent to manage pending orders and incoming orders. Purchase orders also are the economical option for the business since they streamline the buying process to a standard procedure.

Electronic POs or Purchase Orders 

After the advancement of the internet technology, now most of the business organization does use a paper based purchase orders but instead transmitted electronically over the World Wide Web. It is general for electronic purchase orders to be utilized to purchase goods or services on the internet for physical goods or services of any kind.

OAGIS (Open Application Group Integration Specification) from OAGi

Use of the XML message format for electronic PO has occurred since the beginning of the XML in the year 1998. The OAGIS has incorporated a PO since its beginning in the year 1996. Implementations of the PO based on the OAGIS are quite common, as well as support by several leading enterprise business software vendors and implementations by several of the global Fortune 500 companies.

Questionnaire:

• What is PO or purchase order?
• What are the types of purchase orders?