Purchase Order

A purchase order (PO) is a formal document issued by a buyer to a vendor, specifying the types, quantities, and agreed prices for products or services. It serves as an official offer and, once accepted by the seller, creates a binding contract between both parties. Purchase orders are essential for tracking organizational expenses, ensuring proper authorization before purchases are made, and providing a clear record for both accounting and audit purposes. Nonprofits use POs to manage and control spending, prevent unauthorized purchases, and maintain transparency in their procurement process. The PO typically includes detailed information such as item descriptions, delivery dates, payment terms, and shipping instructions, which helps streamline communication with suppliers and maintain accurate financial records.