What is a purchase order (PO)? Learn what a PO includes, how the purchase order process works, and how it differs from an invoice and sales order — plus how to handle POs without manual data entry.
In this article
A purchase order, or PO, is the document a buyer sends a seller to officially place an order. It sets out exactly what the buyer wants — the products, quantities, agreed prices and delivery date — and acts as the buyer's commitment to buy. Once the seller accepts it, the PO becomes the agreed record of the order that both sides work from.
In wholesale, the purchase order is the moment a retailer turns "interested" into "ordering." It's the paper trail behind the deal: what was agreed, at what price, and on what terms.
What a purchase order includes
A complete PO leaves no room for guesswork. Most include:
A PO number — a unique reference both sides use to track the order.
Buyer and seller details — company names, contacts and addresses.
Line items — each product with a description, its SKU, the quantity ordered and the agreed unit price.
Order total — the sum of the line items.
Delivery details — ship-to address and the date the buyer needs the goods.
Terms — payment terms, shipping method, and any reference to a minimum order or agreed conditions.
How the purchase order process works
The PO sits in the middle of a simple sequence:
The buyer creates the PO — often built from a brand's line sheet or catalog.
The buyer sends it to the seller.
The seller confirms it with an order acknowledgement, checking stock, price and dates.
The seller ships the goods and sends an invoice that references the PO number.
The buyer pays according to the agreed terms.
The PO number ties the whole chain together — order, delivery note, invoice and payment all point back to it, which is what makes the process easy to track and audit.
Purchase order vs invoice
This is the most common mix-up. The difference is who sends it and when:
A purchase order is sent by the buyer, before fulfilment — a request and commitment to buy.
An invoice is sent by the seller, after fulfilment — a request for payment.
Same order, opposite directions, different stages. The invoice usually quotes the PO number so both documents match up.
Purchase order vs sales order
Another easy one to confuse. A purchase order is created by the buyer to place the order. A sales order is created by the seller in response, confirming they can fulfil it and recording it in their own system. Two sides of the same transaction — one outbound from the buyer, one internal to the seller.
Types of purchase order
Not every PO is a one-off. The common types:
Standard PO — a single order where all the details are known upfront.
Planned PO — the items are known, but delivery dates are estimated.
Blanket PO — an agreement to buy over a period, often at pre-agreed pricing, with deliveries drawn down as needed.
Contract PO — a framework agreement that individual future orders reference.
Most wholesale orders are standard POs; blanket POs come up with regular, repeat stockists.
Why purchase orders matter in wholesale
A clear PO process protects both sides. It gives the buyer control over what they've committed to, gives the brand an accurate instruction to fulfil against, and leaves a record that heads off disputes over price, quantity or timing. It also makes accounting cleaner, because every invoice and payment traces back to a PO.
The friction isn't the PO itself — it's how brands handle it. POs arriving by email, PDF and WhatsApp, then getting re-typed into a spreadsheet by hand, is where errors and delays creep in.
How purchase orders work in Orderchamp Cloud
Orderchamp Cloud removes the manual step. When a buyer orders through your branded B2B portal, the purchase order is captured digitally the moment they submit it — nothing gets re-keyed. When a buyer still sends a PO by email or on paper, AI Order Convert reads it and turns it into a digital order. Either way, orders land in one place, ready to fulfil — see how to manage wholesale orders without the manual entry. It's part of running modern B2B e-commerce, and reps can capture orders in person too with an order-taking app.
Frequently asked questions
What is a purchase order (PO)?
What's the difference between a purchase order and an invoice?
What's the difference between a purchase order and a sales order?
What should a purchase order include?
What are the main types of purchase order?
Why do purchase orders matter in wholesale?
How can I process purchase orders without manual data entry?