Who may change price, quantity, supplier, or delivery date?
What evidence confirms goods or services were received?
When is the order partially or fully closed?
Meaning in day-to-day work
What does it mean in practice?
A purchase order is an approved commitment sent to a supplier. It defines what may be bought, from whom, at what price and currency, for which location or cost object, under which delivery and payment terms. It is not a supplier invoice or proof of receipt.
Practical example
A department requests 50 units. Procurement selects the supplier, an authorized manager approves the value, and the PO is sent. The warehouse later records the quantity received and finance matches the supplier invoice before payment.
From start to close
How does the workflow operate?
1
Convert an approved need or requisition into a sourced purchase.
2
Confirm supplier, item/service description, quantity, price, tax, currency, and terms.
3
Route the commitment through the correct approval limits.
4
Issue the controlled PO and record supplier acknowledgement or changes.
5
Receive, match invoices, manage remaining quantities, and close the order.
Recommended controls
What protects workflow quality?
Approval before supplier commitment
Version history for price, quantity, and delivery changes
Receipt and invoice matching with tolerance rules
Monitoring of open commitments, overdue delivery, and stale orders
Common mistakes
What should teams avoid?
Creating a PO after the supplier invoice arrives
Using vague one-line descriptions that cannot be received or matched
Leaving cancelled or fully delivered orders open indefinitely