The purchase order specifies an agreement between the seller and the buyer.
The objective of a purchase order is to communicate within your own firm and communicate to the supplier the quantity, quality, and type of materials or services being ordered, as well as the prices agreed upon, the method of packaging and shipment, credit terms, and any conditions or specifications which must be met.
A purchase order should contain at least the following information where it applies:
In addition, many firms print a series of standard terms and conditions on the back of each purchase order. These are, of course, different for different firms. Their purpose is to provide a measure of legal protection in the event of disputes with the seller on matters concerning some or all of the following:
Motivating Suppliers to Meet Their Obligations
In general, manufacturers who want to motivate their suppliers to give them outstanding service and who expect to have reliable vendors must, of course, follow the golden rule and treat good vendors the same way as they want to be treated by their customers. This means that, as buyer, you should not:
Good relations require an understanding of the vendor's needs and willingness to solve problems in a constructive, positive way.
The purchase order should be a multiple copy form so that the purchase may be effectively communicated to all relevant personnel within your firm. Typically, copies of the purchase order are distributed to purchasing files, and to warehouse or receiving personnel who must check the shipment against the purchase order.
In addition, scheduling/inventory control and possibly quality control people may receive copies.
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