What is a purchase order?

Point of Sale (POS) Glossary

A purchase order is a request from a merchant sent to a supplier. Vendors may be wholesalers, factories, or other resellers. Purchase orders may contain many variables that include terms, items, quantities, shipping information, purchase order number, and costs.

Once accepted, a PO may be considered a legally binding contract in some states. However, POs may include contingencies for either party to cancel. After a purchase order has been delivered, the supplier will often issue an invoice and reference the original purchase order number.

An advanced point of sale system can automate purchase orders, making it much easier for the merchant. Some POS systems also handle check-in of merchandise as it is received from a vendor, which helps cases items from a shipment are missing due to error or non-availability.