Purchase order template
A purchase order (PO) is the document you send a supplier to order goods or services in writing: what you want, how many, at what price, where it should be delivered and by when. This free Excel template has a purchase order whose lines work out the net amount, VAT and gross total for you, and a PO log to keep track of every order you raise.
Running a company of 30 to 200 people? Documents like this are now worth money.
It fixes the price and quantity before anything arrives, gives finance something to check the invoice against, and shows the spending was approved before it was committed.
What's in the template
The workbook has a read-me, the purchase order, the PO log and a filled-in example of each. The order's header holds the PO number, date, supplier, quote reference, delivery address, required-by date, budget code and approval. The example lines, from a fictional contract caterer's order:
| Description | Quantity | Unit price | Net amount | VAT or tax rate | VAT or tax | Gross amount |
|---|---|---|---|---|---|---|
| Basmati rice, 10 kg sack | 8 | 17.40 | 139.20 | 0% | 0.00 | 139.20 |
| Chopped tomatoes, case of 6 x 2.5 kg tins | 10 | 13.95 | 139.50 | 0% | 0.00 | 139.50 |
| Takeaway containers, 650 ml, box of 250 | 4 | 21.60 | 86.40 | 20% | 17.28 | 103.68 |
| Nitrile gloves, size L, box of 100 | 20 | 4.35 | 87.00 | 20% | 17.40 | 104.40 |
| Food-safe sanitiser, 5 litres | 6 | 16.75 | 100.50 | 20% | 20.10 | 120.60 |
| Delivery to site 3 | 1 | 25.00 | 25.00 | 20% | 5.00 | 30.00 |
| Total | 577.60 | 59.78 | 637.38 |
The PO log keeps one row per order. Its Late? column flags open orders past their required-by date, and Invoice matched? records whether the supplier's invoice agreed with the order.
Purchase order, quote or invoice?
| Quote | Purchase order | Invoice | |
|---|---|---|---|
| Who writes it | The supplier | The buyer | The supplier |
| When | Before you decide to buy | When you decide to buy | After delivery, or as the agreed terms say |
| What it says | What they'll supply, and the price, for a limited time | What you're ordering, at what price, where and by when | What you owe and when payment is due |
| What you do with it | Compare it with other quotes | Approve it and send it | Check it against the PO and the delivery, then pay |
The three should tell the same story. Put the supplier's quote reference on your PO and expect your PO number on their invoice. When you're the one selling, the quote template prices the work and the invoice template bills for it.
How to raise a purchase order
- Get the price first. Copy the supplier's quote reference into the header, so every price on the PO is one they've already offered.
- Take the next number from the PO log and add the row straight away, so two people never issue the same number.
- Describe each line the way the supplier does: their item code, the unit (each, case, metre, hour) and the quantity. "Gloves, large" is ambiguous; "GL-100, nitrile gloves, size L, box of 100" isn't.
- Enter each line's VAT rate as the supplier charges it. In the UK most goods and services are standard-rated at 20%, but most food is zero-rated, so one order can mix rates. If in doubt, use the rate on the quote.
- Say where it goes and when you need it; the supplier plans the delivery around both.
- Get it approved before it's sent by someone whose spending limit covers the gross total, then send it as a PDF and save a copy with the log row.
- Check the delivery against the PO, mark any shortfall in the log, and give finance the PO and delivery note to match against the invoice.
Example: a contract caterer's order
The example sheet is an order from a fictional 65-person contract caterer that runs staff restaurants on three client sites. The buyer orders rice, tinned tomatoes, takeaway containers, gloves and sanitiser for site 3, plus the wholesaler's delivery charge. The two food lines are at 0% VAT and the rest at 20%, so the order comes to £577.60 net, £59.78 VAT and £637.38 in total.
The caterer's operations manager can approve orders up to £1,000 and the finance director anything above that, which is why the deep clean in the PO log carries the finance director's name. When the wholesaler delivered only half the gloves, the site marked the order Part received, so the invoice is checked against what arrived rather than what was ordered.
Common mistakes
- Raising the PO after the invoice arrives. A retrospective order controls nothing; it only tidies the paperwork.
- One person orders, receives and approves payment. Split those jobs between at least two people, so nobody can buy something and pay for it alone.
- Lines such as "sundries" or "as quoted" that can't be checked against a delivery.
- No required-by date, so a late delivery is nobody's fault.
- Paying invoices that quote no PO number. Ask the supplier to reissue them, or the matching never starts.
- Never closing old orders, so last year's open POs still look like money committed.
Frequently asked questions
Can I reclaim VAT using a purchase order?
No. In the UK you reclaim VAT on the supplier's valid VAT invoice. GOV.UK says you can't reclaim it using an invalid invoice, a pro-forma invoice, a statement or a delivery note, and a purchase order is your own document. The VAT on your PO is there so its total matches the invoice.
Do we need a purchase order for every purchase?
No. Set a value above which a PO is required, and list the exceptions, such as rent, utilities and small card purchases. Write the rule into your purchasing procedure so everyone knows when one is needed.
What is a blanket purchase order?
One PO covering repeated deliveries from a supplier over a period, up to an agreed total value, such as weekly dry goods for a quarter. Each delivery is checked against it until the value is used up or the PO expires.