Purchase Order (PO):
A purchase order (PO) is a document sent to a supplier when you or someone in your company purchases something. This could be for stationery, office furniture or even inventory. However,
before a PO is sent to a supplier, a purchase requisition has to be approved by an authorized person.
Generally, all purchase orders should reflect:
A PO number;
The name of the product or service;
The quantity;
Any additional terms for the sale, such as discounts, etc;
What is a purchase order used for?
As previously mentioned, a purchase order plays a big role in the purchasing of goods. It is beneficial to all companies, irrespective of their size. Large companies are likely to have a procurement department dedicated to this function, while smaller business owners prefer to create purchase orders themselves.
Sales order (SO):
A sales order (SO) is issued to the buyer by a supplier or service provider. In most cases, it is issued once payment is received from the buyer.
All sales orders should contain the following information:
The name of the product or service;
The quantity;
Terms of the sale, such as discounts, etc.;
The time frame for payment and delivery schedule.
